Tax Cuts For Homeowners

4 Tax Deductions You Don’t Want To Forget

February 21st, 2008 categories: Buyers, For Homeowners

tax benifits Its getting close to tax time for me.

Around this time of year I start looking for every tax deduciton I can get to decrease how much I owe my hungry uncle.

One of the largest deductions that I love being able to take come from simply owning a home. If you are a homeowner, especially a new one, it will pay to read this post. I want to let you in on 4 huge tax benifits that you don’t want to forget this year.

1. If you purchased a home on any day other than the first day of the month, you most likely paid “daily interest” until the end of the month. This interest is usually deductible. Check out line 901 of your HUD Settlement Statement.

Also, loan origination fees and discount points are many times tax deductible. The seller may have paid them for you! Check out lines 801 and 802 of your HUD Statement.

2. If you purchased a loan that included mortgage insurance last year, you could be in for a newly created tax break. There are income restrictions involved. Check with your tax advisor for guidelines.

3. One of the largest tax cuts comes from being able to deduct the interest you paid on your mortgage. Most loans are pre-loaded with a lot of interest so your first few years could help you pocket a lot of hard earned money. For those of you with interest-only loans you could deeply benefit from this deduction.

4. I saved the best for last.

If you have been so lucky as to have your home increase in value you could be in for a huge tax break! If you lived in your home 2 of the last 5 years and sell, the equity that you earned is tax free up to $500,000, if you are married. Sorry, if you are single it is only up to $250,000. The home must have been your primary residence so this doesn’t work with rental properties.

The moral of the story: Get married and start buying!