With tax day quickly approaching (April 15), here are some reminder on tax benefits you might be eligible for as a homeowner. (Please verify with your tax adviser if you are eligible for these benefits.) Thanks to www.houselogic.com for providing this information.
- One of the most beneficial deductions homeowners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. You must itemize your deductions (instead of taking the standard deduction) and for most homeowners itemizing outweighs the ease of the standard deduction. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can be a house, trailer, or boat, as long as you can sleep in it, cook in it, and it has a toilet.
- You can deduct the cost of private mortgage insurance (PMI) as mortgage interest on Schedule A if you itemize your return. This only applies to loans taken out in 2007 or later and your 2014 taxes may be the last year you can claim the deduction unless Congress renews it for 2015.tatat
- Prepaid interest (or points) you paid when you took out your mortgage is generally 100% deductible in the year you paid it along with other mortgage interest. If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year. But if you refinance to get a better rate or shorten the length of your mortgage, or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the life of your mortgage.
- You can deduct on Schedule A the real estate property taxes you pay. 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. If you bought a house last year, check your HUD-1 settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.
- If you made your home more energy efficient in 2014, you might qualify for the residential energy tax credit. Tax credits are especially valuable because they let you offset what you owe the IRS dollar for dollar for up to 10% of the amount you spent on certain home energy-efficiency upgrades.