Take Advantage of These Tax Breaks for Homeowners

Don't let the pressure of tax season tempt you to take the standard deduction on your taxes. Homeowners have several advantages over renters when it comes to deductions on their federal income taxes. Not only can virtually all mortgage interest be written off for your primary home, but for a second home as well. This is encouraging to home buyers considering purchasing real estate at Lake of the Ozarks. This benefits first-time home buyers with a 30-year loan significantly, whose early payments are interest only. With Lake of the Ozarks' popularity as a second-home market, vacation homeowners should take advantage of the deductions as well. You could be eligible to decrease your taxable income by deducting the following items:

Mortgage Interest

 

If you are a homeowner and are the primary borrower of the home, you should qualify for a deduction on your mortgage. Condos and second homes that are considered residences are also eligible for the deduction. Each year, the interest portion, not the principle of the monthly mortgage payment, is what can be deducted. Lines of credit or home equity loans are also considered mortgage interest deductions. As long as the loan is a secured debt on your home, it is generally deductible. However, you can't deduct interest on a mortgage for a third or fourth home, etc. Restrictions may apply in some situations, so if you are in question, consult a tax professional.

Real Estate Taxes


The IRS allows you to write off real estate tax for a home that you own. To deduct real estate tax for your main home, you'll need to itemize this deduction. Real estate tax is deductible the year you paid it. Pre-paying 2017 real estate taxes in 2016, will need to be deducted in 2016. If two or more people are on the mortgage, the deduction can be split based on what each person paid. To find out what you paid for your real estate taxes, ask your mortgage lender or county assessor's office. If your taxes are not paid through an escrow account with your lender, you pay the tax assessor directly each year.

Mortgage Insurance


Not to be confused with homeowners insurance, mortgage insurance is for buyers that put down less than 20% when they purchased the home. Private mortgage insurance is available to protect lenders when they accept small down payments. Monthly payments are made to the insurance company and can be deducted each year it is paid. Homeowners insurance, on the other hand is only deductible if you work from home exclusively.

Itemization


Other common itemized deductions include personal property, charitable donations and travel, medical and dental expenses. Combining these items with mortgage interest, real estate taxes and insurance if applicable, will generally bring the homeowners total above the standard deduction. By itemizing your deductions, you can avoid paying more taxes than you actually owe!

Devine & Associates Real Estate


Devine & Associates Real Estate specializes in residential sales and first time home buyers at Lake of the Ozarks. Additionally, we focus on investment properties and condominiums. If you are looking for your first home or a vacation property, we work together to go above and beyond the hopes of our buyers. Please contact us at (573) 392-9900 to start your search for that dream property today!

www.DevineOnDemand.com

Where Your Best Interests and Our Best Efforts Meet!

Devine & Associates Real Estate
(573) 392-9900

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