Did you buy a home this year? Congratulations! The purchase of your first home is an exciting time, not to mention a huge step in your life.
In addition to having a place to call your very own, there are also tax benefits for new homeowners when you no longer take the standard deduction. Here are a few things to keep in mind when you visit your tax professional or complete your taxes.
Mortgage Interest - for most people, this is the largest tax break from owning a home. Your lender will send you a 1098 form and the amount you're able to deduct will be listed on the form.
Points - some people pay points to the lender to qualify for the mortgage they want. It is usually expressed as a percent of the loan amount. Those points are deductible, even if you negotiated the seller to pay the amount at closing. This deduction will also be shown on your 1098 form.
Property Taxes - you can also deduct the local property taxes you pay each year. If you pay your taxes through an escrow account (this is typical if you have a mortgage loan) this deduction will show on the tax form from your lender. If you pay directly to the municipality, you'll have to look through your finances to see the exact amount that you paid.
PMI - buyers who make less than a 20% downpayment usually have to pay premium mortgage insurance on their home loan. Lenders require this because it protects them if the borrower fails to repay the loan. Buyers being able to deduct this amount has been extended through 2019.
There are various other deductions you are now able to take as a homeowner. Make sure you get them all. If you're doing your taxes yourself, do a little research as to what you qualify for. If you use a tax professional, your job will just be to provide them all the data they need to get that extra money for you. If you need anything that we can provide, please let us know (970) 858-9870! We're here to help you through your home buying journey, and that includes after the sale too.