[dropcap2]If[/dropcap2] you are like me, you are probably thinking about taxes right now so to help get us all in the right state of mind, I’d like to share with you some home tax breaks for homeowners. Some you may be familiar, like the mortgage interest deduction or energy tax credits. Either way, you could save money and hopefully time. Please see each link below for IRS references.
Mortgage Interest Deduction
One of the neatest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. interest you pay on a mortgage is deductible when you use the loan to buy, build, or improve your home. Try the Calculator here.
PMI & FHA Mortgage Insurance Premiums
What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted. Calculate yours with PMI calculator.
Prepaid Interest Deduction
Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid them along with other mortgage interest. If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.
Energy Tax Credits
The energy tax credit of up to a lifetime $500 had expired in 2011. But the Feds extended it for 2012 and 2013. Here are some of the systems eligible if installed.
Home Buyer Tax Credit
There were federal first-time home buyer tax credits in 2008, 2009, and 2010. f you claimed the home buyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest. The IRS tool to calculate what you owe is available at their website.
Property Tax Deduction
If you bought a house in 2012, check your HUD-1 Settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.
Here are some other items that may be of interest, compliments of Realtor.com or the Homeowners Guide to Taxes.
More helpful tax tips at MardelliRealEstate.com.