Are you a homeowner? If so, you need to know what tax write offs you are eligible for. Whether you purchase a home last year, or 20 years ago you need to make sure you are not missing out on any deductions.
In an article by FoxBusiness.com, we found some good tips and information for you!
"The amount of tax breaks depends on the size of your mortgage and your income bracket." explains Bob Walters, chief economist at Quicken Loans. For example, "if you have $110,000 loan and pay $4,000 in taxes and the standard deduction is $12,000 you're not exceeding it."
*Ask your tax advisor if you qualify for this deduction.
Here are a few tax deductions to look out for...
- Home Mortgage Interest Deduction
Another tax deduction for homeowners? Home mortgage interest deduction. With this deduction you are allowed to reduce your taxable income by the amount of interest paid on the loan each year.
"Mortgage interest is the biggest deduction for a homeowner," says Les Kramsky, executive vice president and general counsel to title insurance agency Silk Abstract Company. "It's a big tax advantage for homeowners."
- Property Taxes
Property taxes here in Central Ohio will vary by city, by school district and even by neighborhood. Nobody wants to see their property taxes in the $10,000 or $20,000 and sometimes even higher. But the perk is that you could see a substantial tax write off. Talk to your tax advisor about the details!
- Closing Costs - Mortgage Points
Did you buy a home last year? If so, you might be eligible for a tax write off. Specifically let's talk about mortgage points. Your lender might have asked you during your home buying experience whether or not you wanted to "buy points". This is translated to lowering your interest rate over the life of your mortgage. Each point is a percentage, and the amount you paid may be eligible for a tax deduction.
There are more perks to buying a home than you realize! Talk to your tax advisor about all of the tax deductions you may be eligible for from buying a home last year.
- PMI - Private Mortgage Insurance
Did you take out a mortgage between 2007 and 2011? If so, you may be eligible for a tax deduction if you are paying PMI. "This deduction no longer exists, but if you took out your mortgage between the years 2007 and 2011 you can deduct your PMI premiums even if you are paying them after 2011," says Kramsky.
Other deductions to watch out for...
- Construction Loan Interest
- Home Improvement Loan Interest
- Home Office
- Selling Costs
Of course these examples just scratch the surface. Make sure you talk to your tax advisor to see what you are eligible for to make sure you do not miss out on any deductions.
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