The Housing and Urban Development (HUD) is responsible for some of the most important housing programs in our country, including the Section 8 housing voucher program, which helps low-income families pay the rent, and the Low Income Housing Tax Credit (LIHTC), which helps developers build new homes for low-income families. Multiple HUD rules govern these programs, and the most common of these is the “rent deduction” rule, which allows the tenant to deduct the portion of rent that is not covered by government assistance.
HUD, or the U.S. Department of Housing and Urban Development, offers renters certain deductions when determining how much money they’re required to pay in rent each month. The deductions for unreimbursed expenses are one of the most common among renters.
The federal government has ruled that you are generally only allowed to deduct unreimbursed expenses for your housing, including rent or mortgage payments, utilities, and property taxes. Food, health care, transportation, and child care are not deductible. However, you may be able to deduct some expenses for your disabled, elderly, or dependent household members, including medical, disability, and child care.
Why HUD Deductions Matter
When you move into a new home, you usually pay the difference between the taxes and insurance on the property and your actual monthly rent. But some landlords charge even more after those taxes and insurance and before the rent for things like a pool and gym membership. And that isn’t legal, according to the federal Department of Housing and Urban Development (HUD). However, some tenants didn’t know that, and some landlords didn’t tell them.
HUD deductions are part of the standard tax code, and as such, most taxpayers are eligible for them. The most common deductions are for retirement income, medical expenses, mortgage interest, and state and local income taxes. However, the reason HUD deductions are important to you is that they may affect your credit score.
Deduct Your Dependents
Deducting the value of your dependents (spouses, children, and/or other dependents) from your gross income is one of the most popular tax deductions available. Unfortunately, many taxpayers never claim this deduction, thinking it is too complicated to claim. If you are one of those taxpayers, you’re right to worry about the deduction. But it’s not too difficult to come up with a safe and sure way to claim it.
Deduct the Disabled
If you have a child under the age of 18 that is disabled, you may qualify for a $400 deduction from your tax return. The deduction is available for a child that is permanently and totally disabled, defined as having a condition that results in a workload of more than one-half of your average workweek. In addition, if you have a child under the age of 16 that is disabled, a maximum of $100 a year may be deducted. The deduction is available if a child is permanently and totally disabled, defined as having a condition that results in a workload of more than one-half of your average workweek.
Check for More Deductions
There are other deductions also, such as kids care deduction, medical expense deduction, and more. You may be eligible for further deductions depending on the income estimate criteria set by the local public housing authority.
For those looking to deepen their understanding and stay updated on the latest trends, don’t miss out on our series of engaging HOTMA webinars designed to educate and inspire.
Attend the Compliance Prime webinar to learn more about HUD deductions.
