Owning a home has so many wonderful perks—including tax deductions! As you prep your taxes this year, HouseLogic offers advice on deductions you don’t want to miss from mortgage interest to property taxes.
1. Mortgage Interest Deduction: Interest paid on a mortgage of up to $1 million is deductible when you use the loan to buy, build or improve your home. You can claim this deduction in Schedule A.
2. Prepaid Interest Deduction: Prepaid interest (or points) that you paid for when you took out your mortgage are usually 100% deductible in the year you paid them. This is in addition to any other mortgage interest.
3. Property Tax Deduction: According to HouseLogic, “If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.” You can deduct your taxes on Schedule A as well.
4. PMI and FHA Mortgage Insurance Premiums: If you itemize your return, you can deduct your private mortgage insurance (PMI) as mortgage interest on Schedule A. This however only is applicable if you took your loan out in 2007 or later.
5. Vacation Home Tax Deductions: How you file taxes on your vacation home can be a bit confusing, but it all depends on whether you alone use your home or if you rent it out. HouseLogic goes in depth here.
6. Energy-Efficiency Upgrades: If owning a home with energy-efficient upgrades wasn’t already great for your bills, the Nonbusiness Energy Tax Credit allows you to claim a credit for installing energy-efficient home systems.
To learn more about home ownership tax deductions, you can also visit TurboTax.com. And to learn more about new homes in the area that you can build and own this year, pick up The Greater Charleston New Homes Guide or subscribe for free.
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