Are you feeling the sting of Tax Day yet? If so, buying a home will almost certainly provide you extra deductions for this year, which means less taxes and more money in your pocket next year! Consider these five tax-saving deductions for homeowners:
· Loan points: Any “points” paid to your lender for your new home mortgage are deductible, up to the lesser amount of your down payment or the points.
· Property taxes: The property taxes that you pay to the county twice per year are deductible. This is true even if your taxes are paid through a lender escrow account.
· Mortgage insurance premiums: If you put down less than 20%, you may be required to pay premiums for mortgage insurance. The premiums paid are deductible, unless you make above a certain income.
· Home equity interest: If you take out a home equity loan, you can generally deduct interest on up to $100,000 of the home-equity debt as mortgage interest.
· Tax-free profit on sale: If you own and live in your home for at least two of the last five years before selling the property, the gain of up to $250,000 for singles or $500,000 for a married couple can be taken tax free.
Check with your accountant or CPA to ensure that you qualify for these tax savings and to analyze your unique tax situation. If you’re interested in selling or purchasing a home, please contact Esquire Real Estate for all of your real estate needs.