Tax Considerations and Home Ownership
February 5, 2016
Right about now you are probably furiously gathering paperwork and getting ready to submit your taxes for 2015. If you are a new home owner, congratulations! You are probably about to see some of the tax advantages in action. If you are still contemplating a new home in Oklahoma City then here are some things that will help you get to where you home owning friends are right now. Whether you are a new home owners or want to be one soon, these tips will help you out when it comes to tax season. With new homeownership comes a slightly more complicated tax process, but it’s well worth the effort. Say goodbye to EZ filing, and say hello to Schedule A. Itemization may be the best way to take advantage of all your potential tax savings. While this is the case for some homeowners, others may opt to take the standard deduction.* Here are a few expenses that can be deducted on Schedule A. Mortgage Interest – This is one of the biggest tax breaks you’ll see and it comes in the form of your monthly payment. This is not just deductible on the first mortgage. If you refinanced your loan and pulled out extra money, or got a home equity loan you may see more money coming your way on equity debts. (Check with an accountant for more details) Points – Did you pay points to reduce your rate on a new home purchase in the year you are doing your taxes? Generally, they are deductible in the year you paid them depending on factors which include whether or not this is the home you live in. Again checking with a tax professional could help you take advantage of another tax break. Property Taxes - Your property taxes that you pay each year can be deductible. Make sure if you reimbursed the seller for taxes they paid for the year during your closing that you include those too. PMI – If you were required under the terms of your loan to take out mortgage insurance premiums, depending on your adjusted gross income and the year your insurance policy went into effect you may be entitled to further deductions. As you gather everything and prepare for tax season, make sure to keep all this in mind when you are preparing your taxes and talking with tax professionals. It may be worth while to itemize this year to take full advantage of your homeowner status. *This is not a class on tax filing. Make sure you talk with a tax professional or do further research. The information in this article is meant for general information purposes only and is not meant to be tax reference or advice.