Tax Savings for Homeowners
Tax filing is an important time for new homeowners or long time homeowners who have bought a new home in the past year. Often times a taxpayer is well served to obtain professional assistance in the initial filing year after they acquire their new home. Three items immediately come to mind when reviewing the tax advantages of Home Ownership:
- Mortgage interest deduction. Assuming this home is your personal residence, 100 percent of the mortgage interest you owe and pay before December 31, 2011 is deductible on your 2011 taxes. In January, your mortgage lender will send you a form documenting the precise amount of interest you paid, although most lenders also now make this form immediately available to borrowers online.
- Property tax deductions. Again assuming that this is the home you live in most of the time, you should be able to deduct 100 percent of the property taxes you've paid to your state and/or local taxing agency this year.
- Closing cost deductions. Discount points and origination fees paid to your mortgage lender and/or broker at closing are frequently deductible, but there are rules around this, which tax software and/or professionals can help you make sure you meet. Note that, according to Internal Revenue Service Publication 530, "You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home."
Publication 530 can help you dig out other less obvious deductions and credits.
Be organized, visit our website for a free organizer to help in gathering pertinent tax data. May your refund be large.
