If you can afford to purchase a home right now, it’s still a great time, because home values are still low and tax benefits are still numerous. So, whether you’re a current homeowner, or thinking about purchasing your first home, it’s important to know about the tax write-offs available to homeowners, so you can take advantage of all of the great benefits available to you simply for owning a home. Here are three tax write offs for homeowners:
Mortgage Interest: Mortgage interest is the interest you pay on your home loan. The mortgage interest deduction allows you to reduce your taxable income by the amount of interest you pay on the home loan each year.To receive a tax deduction for your mortgage interest, choose to itemize deductions, and make sure that your deductions exceed the standard deduction. It is also possible to deduct mortgage points, which some homebuyers purchase during the process of buying a home in order to lower their mortgage interest rate.
Property Taxes & Real Estate Taxes: Taking advantage of these tax breaks can be especially helpful, especially if you live in an area in which the property taxes are in the double digits. Real estate taxes paid at closing can also be written off.
Closing Costs: The cost of closing on a home can seem almost unreasonable at times, but closing costs have tax benefits for you in the year that you pay them.
Although all homeowners are eligible for tax breaks, “the amount of tax breaks depends on the size of your mortgage and your income bracket”, according to writers for Fox Business, so talk to your real estate agent, financial planner, and/or lender about the financial perks you’ll receive for owning your home.
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