As the ominous April 15th deadline looms ahead, it’s a good opportunity to get familiar with the available tax credits for homeowners. Though some taxpayers may find it best to take the standard deduction, many homeowners will find it better to itemize once they buy a house. When speaking with a CPA about filing, these are the most likely tax credits for homeowners:
- Mortgage Interest – For any homeowners with a mortgage, the payment you make each month primarily pays interest. The good news is – that interest is deductible (unless your loan was for more than $1 million). There’s even more good news if you own a second property too. As long as you vacation or stay in that second home for at least 14 days per year, that interest can be deducted as well.
- PMI – Private Mortgage Insurance is used when a homeowner makes a down payment of less than 20%.
- Home Equity Debt – If you take out a home equity line of credit, particularly for “home improvements”, that is also deductible.
- Home Office – The costs associated exclusively with the use of business can also be deducted if your office is used primarily for business or you meet with clients at your home office regularly.
- Mortgage Points – When you bought or refinanced your home, you may have paid points for a better interest rate. If so, these points can also be deducted.
- Real Estate Taxes – Local and state real estate taxes that are paid for the year can also be deducted.
Even with the dreaded tax deadline ahead, there are some tax benefits to being a homeowner. This post just highlights a few of the most common tax credits for homeowners. It’s important to work with a certified professional to be sure there aren’t others you can use.
As your trusted Nashville real estate agency, we want to help connect you with the resources you need before, during, and even after the home buying process. Call us during business hours at 615-550-5565 or come visit our office in Franklin, just a few minutes south of Nashville.