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Tax Breaks For Home Owners

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Tax Breaks For Home Owners

Many people do not realize thatif they own a home, they can take advantage of deductions that will help them during the tax season.Take a look at the different situations belowto see if you qualify for a deductionthistax season!

Mortgage Interest Paid: Mortgage interest paid to a lender is tax-deductible. For many, this represents the biggest tax break available to homeowners.

Points:If you paid points to get a better rate on your loan, there is a tax break for you. However, the IRS will only allow you to deduct the points in the year they were paid.

Property Taxes:You will receive aproperty tax deduction for each year you own your home. Sometime in January you should receive a form 1098 from your mortgage company. This form details mortgage interest paid, the amount paid into escrow,and the amount disbursed from escrow to your local tax office.

Energy Efficiency:TheIRS credits more than just mortgage interest paid at tax-time. Itallows tax breaks for certain renovations and appliance purchases, too. The government'sEnergyStar.govwebsite is an excellent sourceforhomeowners.When you buy new windows, new doors, new heating and cooling units,or anythingthatuses green energy,it may increase yourtax deductions.

Real estate taxes paid at settlement or closing.Real estate taxes are generally divided so that you and the seller each pay taxes for the part of the property tax year you owned the home. Your share of these taxes is fully deductible if you itemize your deductions.

Formoreinformationonallowabletaxdeductions for homeowners,visitIRS.gov