Tax Season Savings for Homeowners

Tax Season Savings for Homeowners

Well, it is getting close to that time of year…April 15^th Tax Day.  Since likely none of us are tax experts, we should be prepared with questions for the tax professional to make sure we’re getting our optimal deductions (and probably to annoy the poor tax preparer.)

Here are some deductions you may be able to use:

Mortgage interest. You will receive a form 1098 from your lender with the amount of interest paid in 2015. For many who itemize this is the biggest deduction. And for first time homebuyers, you can deduct any prepaid interest you pay at closing.

Points on mortgage or refinancing. You may have paid points to your lender. According to TurboTax, “If the loan is secured by your home and the amount of points you pay is typical for your area, the points are deductible as interest as long as the cash you paid at closing via your down payment equals the points.”

Loan origination fees. Many mortgages have loan origination fees and some of these fees can be deducted.  See which loans qualify for this deduction. Make sure your loan meets the qualifications for this deduction.

Property taxes. A major deduction is your property taxes. For many, this is a large chunk of your monthly mortgage payment.  If you purchased your home in 2014, you can deduct the prorated property taxes you paid to reimburse the seller for property taxes they made during the time you owned the home. That number can be found on your settlement sheet.

Home equity loan interest. If you took out home equity or improvement loan, then you may be able to deduct the interest.

Mortgage insurance. If you pay private mortgage insurance, or PMI, don’t forget to take that deduction, too.

Home office. Do you use a portion of your home for business only? Then this deduction may be for you.

Selling your home. There are several tax breaks for those who sold their home in 2014 and generally are used to reduce a capital gain. Some of these deductions can include: title insurance, real estate brokerage fees, escrow fees, inspection fees, legal fees and/or advertising. And if you moved because of a new job more than 50 miles away, then you may be able to deduct moving expenses.

P.S. Please consult your tax professional or consult www.irs.gov to see which deductions you may qualify for.