The tax advantages of being a home owner is only one of the many reasons owning a home builds more wealth than renting. When tax season rolls around each year it may not feel like it, but knowing where your savings are can help take the sting out of the final tally.
Every person’s situation will be different, so you simply must check with your tax specialist to discover which of these tax savings you are eligible to take advantage of this year.
JUST BOUGHT A NEW HOME?
Some of the greatest tax advantages are in the first few years of a new mortgage, so if you are a new home owner, these savings can add up fast!
POINTS – the payment you made to lower the overall interest being paid for your mortgage is usually a deductible expense your first year
MORTGAGE INTEREST – depending on when your purchase was made, this may not be significant this first year, but the next several, when you are paying the highest amount of interest monthly, can add up to BIG savings at tax time
PMI- (Property Mortgage Insurance) in many cases this amount is a deduction
SEASONED HOME OWNER?
You’ve been enjoying that mortgage interest break, but have you also been deducting:
PROPERTY TAXES – has your preparer been adding this savings to your total liability?
HOME IMPROVEMENTS – Certain improvements that make your home more energy efficient also make it a source of greater tax savings! Those new windows and the attic insulation? Could be those costs are a tax deduction
ALTERNATIVE ENERGY – most renewable energy sources, like solar panels, not only lower your energy bills but can do the same for your taxes
CHECK OUT THESE RESOURCES FOR MORE!
You can usually access a list of tax deductible energy upgrades on the website of your energy provider. Also, check this IRS publication for more information: http://www.irs.gov/pub/irs-pdf/p530.pdf
Please call me if you have questions about buying or selling a home. It would be my pleasure to offer assistance to you in this process.