8 Tax Breaks and Credits for Home Owners & Home Buyers
Do you own a home? Are you thinking of buying a home? Were you one of the many that purchased a home last year? April 15th will be rolling around soon and it’s important for you to know what tax breaks and credits for which you qualify as a home owner.
Here are a few of the tax breaks for which you may qualify:
Mortgage interest paid at settlement. On mortgages of up to $1 million, home owners can deduct the interest paid at settlement if you itemize your deductions on Schedule A (Form 1040). This amount should be included in the mortgage interest statement provided by your lender.
Points. If you pay points to obtain your home mortgage, these fees can be deducted as long as they are associated with the purchase of a home. If you refinanced your home, these points are still deductible, but it must be done over the life of the mortgage.
Property taxes. You can deduct your state and local property taxes, as long as they are based on the assessed value of the real property. However, if your money is being held in escrow for the purpose of paying property taxes, you cannot claim this deduction until the money is actually taken out of escrow and paid.
Selling costs. Did you sell a home in the past year? You may be able to deduct the amount of your selling costs, such as repairs, title insurance and broker’s fees. The IRS only allows the deduction of repair costs if the repairs were made within 90 days of the sale. Selling costs are deducted from your gain on the sale.
Home office. If you use a portion of your home exclusively for the purpose of an office for your small business, you may be able to claim a deduction on your taxes for some costs. You may also be able to take advantage of this deduction if part of your home is used for storing items for your business.
Mortgage insurance premiums. You...