There are many benefits to purchasing your own home. One of which is the tax deductions you will be eligible for as a home owner. Here is a look at some these home owner tax deductions:
Mortgage Interest Deduction
The first couple of years that you pay on your mortgage the majority of your payment will go toward your interest. While that has an obvious down side the interest on your mortgage is tax deductible.
Real Estate Tax Deductions
Another amount you can deduct from your taxes are any property tax you have to pay out each year. This is a tremendous tax advantage since property taxes continue to rise each year.
Charitable Donation Deduction
Surprisingly charitable donations can have an added relevance to home buyers. If you have never itemized your deductions prior to being a home owner, you may want to begin doing so after you purchase your home.
Prior to home ownership a standard deduction may have been more beneficial when filing, however now that you own a home you have several new deductions that are likely to make itemized deductions more beneficial.
Remember that charitable deductions are any items you have donated to a non-profit such as money, supplies, food, or clothing. Just save your receipts to give to your tax professional. If you are donating something that you did not recently purchase such as furniture or clothing from your own home the nonprofit can give you a receipt for your donation.
Other Things to Keep In Mind
Here are a few other items that you can add to your itemized deductions:
- Any expense related to your HUD including the prepaid interest points you paid at closing.
- When you move into a new home there a probably some home improvements like painting and replacing carpeting. While it is not the first thing on your mind when moving in, but save your home improvement receipts to decrease the odd of having to owe capital gains taxes if you sell your home one day.
How Turbo Tax Can Help You
To ensure that you are taking full advantage of all home owner tax deductions you are eligible for as a home owner, try filing with TurboTax Online. You don’t need to worry about figuring this all out. TurboTax makes it easy.
After asking you a few simple questions, TurboTax will determine which tax breaks you are eligible for. That way, you’ll get the biggest tax refund possible with the least amount of hassle. Try their tax refund calculator for free and see how big your refund will be.
More information related to the topic, please continue to next article Tax Breaks for First Time Homeowners.