It’s TAX Time!
Here we are again with April 15th staring us in the face. Good news is if you are a homeowner there are 5 essential tax deductions just for you!
The biggest tax break to homeowners is usually Mortgage Interest. At the beginning of the year your lender should send you for 1098. This will show you the mortgage interest you paid from the previous year. For a new homeowner the form should include interest paid from the date you closed on the home to the end of that month. If it doesn’t, you can find this on your settlement statement.
Homeowners also get to deduct their Real Estate Taxes paid each year. Some homeowners have this paid for through an escrow account with their ender and will receive information from the lender for the amount. For those that pay it directly, check your records and for new homeowners also check your settlement statement for the amount you may have reimbursed the seller for the real estate taxes they prepaid for when you were going to be the homeowner.
If you paid Points to get a better rate on any home loan, the points offer a tax break. You can deduct the points in the year you paid them if the loan is to purchase or build your main home and the payment of points is an established business practice in your area and they are in the usual range.
If you take out a home improvement loan for capital improvements you can deduct the Home Improvement Loan Interest.
You can also earn a tax credit worth up to $500 for some Energy Saving Home Improvements. This is more valuable than a tax deduction because it reduces your tax bill dollar for dollar. Check IRS.gov for qualifying items.
If you are not a homeowner yet, call me and let’s see if you will qualify this year to be a homeowner and be able to add these deductions to your taxes next year!