Home Ownership Tax Deductions

Homeownership allows for many deductions: A homeowner can deduct points used to get a mortgage when purchasing a home, the mortgage interest paid during the year, as well as property taxes.

Your Biggest Deduction is Interest

Your mortgage loan on your home is likely fully amortized, meaning a part of your monthly payment repays the debt and another pays the interest.  If you itemize your deductions, the interest part of your mortgage is typically tax deductible. For deduction purposes, your home can be a house, a condominium, or a mobile home.

You should receive a form 1098 from your lender at the end of the year, telling you how much interest, and points, you paid that year. This is your deductible interest, provided you meet certain conditions.

You can also Deduct Points When (Refinancing)

Any points you paid during refinancing must be deducted over the life span of the loan. For example, over a thirty-year loan, you divide the points and deduct that amount each year.

You can deduct Property Taxes

Since most homeowners pay property taxes, they are also deductible. They must be charged regularly and based on the assessed value.

Use a Certified Public Accountant or knowledgeable tax preparer

Whenever you begin itemizing deductions, it is best to have your tax returns prepared by a Certified Public Accountant or knowledgeable tax preparer.

These are some of the benefits of home ownership, tax deductions, so take advantage of them if you can to save more money each year.  Now is the time to start thinking about homeownership tax deductions!

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