It's tax time! Are you prepared?
Updated: May 7, 2020
According to a recent National Association of Realtors survey—Profile of Home Buyers and Sellers—80 percent of home buyers view home ownership as a good investment, and 43 percent believe that buying a house is a better investment than putting money in the stock market.The association estimates that homeowners save an average of $3,000 a year in taxes from mortgage-interest and property-tax deductions.
We've compiled a few facts about deductions, courtesy of The Washington Post:
Mortgage interest on a refinance, a home-equity loan or a home-equity line of credit may be deducted as an expense.
Private mortgage insurance may be deductible for a second property in addition to a primary residence (as long as the second home is not a rental unit).
Discount points — paid to lower the interest rate on a loan — may be deducted in full for the year in which they were paid.
Discount points on a refinance must be amortized over the life of the loan.
Home improvements made for medical reasons can be tax-deductible under certain circumstances.
Homeowners who work from home can generally deduct expenses for a qualified office — phone lines, heating and electric expenses and renovations — including a portion of mortgage interest, property taxes and insurance.
The deductibility of a mortgage varies with the length of the loan. Homeowners pay about 65 percent less mortgage interest with a 15-year mortgage than with a 30-year loan.
An energy-efficiency tax credit may apply to storm doors and energy-efficient windows, insulation, air-conditioning and heating systems. The credit is currently 10 percent of the amount paid up to $500.
Mortgage-debt relief related to a short sale or foreclosure has been extended to include cancellations completed during 2015 and 2016.
Always verify any tax information with a certified public accountant or other tax professional, or by checking with the IRS.
Good luck, now you can file your taxes like a real homeowner!