Function

• The purpose of all of these tax deductions for homeowner is to provide incentives for people to purchase their own homes. A lot of these tax deductibles were initiated during the presidency of George W. Bush during a time of recession. The tax deductibles were created as a way to stimulate the economy through the real estate market. When people are motivated to purchase large items like houses, then the economy is able to stay at a level that is comfortable for everyone.
  
  

Identification

• There are many different deductions that can be taken by homeowners. If you have a home business, then many of the expenses related to your business can be taken off your taxes. Moving expenses can also be taken off if the move is for a location 50 miles from your previous home. Mortgage interest on your home can almost always be deducted from your taxes. Property taxes can also often be taken off. Even if you purchase a second home for vacation purposes, you can deduct some of the costs from it as well. To find out how many deductions you qualify for, you can either purchase a tax software program or take your taxes to a company that files taxes for you.
  
  

Effects

• The effect of all of the tax deductions available to homeowners is larger than it might look like. For each person who uses the deductions, it means that they get a lot more money back at the end of the year. For the government, it means receiving fewer taxes, yet tax deductions can stimulate the economy.
  
  

Expert Insight

• Finding the deductions that work for you and your home can be a great way to receive more money at the end of the year. Finding the deductions can be hard, however, so it is important that you find someone knowledgeable about tax deductions or a program to help guide you through the process.
  
  

Warning

• It is important to ensure that you take out the right deductions when filing taxes. Anything that you cannot document should not be deducted from your taxes. When people try to take a lot off of their taxes, then they will often be audited. If you cannot prove that you should have received that deduction, then you will have to pay the government back. Such serious tax trouble can even cause some people to go to prison.