Now posted on the Best IRS Tax Refund website, “Tax Deduction Tips for New Homeowners” reveals several key areas in which they can obtain significant deductions and reduce the amount they owe. One must first keep track of their expenses and finances, the author says. |
The first of these tax tips is to report home mortgage interest and points . Using Form 1098, one can report these numbers and have their largest itemized deduction, according to Ellis. This form is sent by lenders. The deduction is based on interest paid on a mortgage loan, and is not affected by one’s overall income. An example is provided by the author to further clarify the concept.
In addition, points reflect amounts that are deductible. A few conditions are mentioned by Ellis, including the fact points must be used to purchase, build, or improve the home in order to qualify.
Real property taxes are another deduction. Once assessed as a percentage of the home’s value, the deduction can be calculated. If these taxes were paid in exchange for a special project, a deduction is not permitted. According to the author nondeductible funds are called “Special Assessments”, while homeowners cannot deduct any associated dues. Frank Ellis also reveals how deductions are allocated and split between homeowners and sellers.
Recordkeeping is covered as well. All receipts and invoices must be saved in case the IRS requests more information that can impact the deductions received. An additional section covers gain exclusion, applicable when one sells their home. Homeowners may not be taxed on gains if they live in the home at least two out of five years. Other points are made on this subject as well. Also, the deductibility of private mortgage insurance premiums is touched upon.
The author closes with some points about home ownership, and mentions the TurboTax online tax filing service that can help. http://www.easyincometaxfilingonline.com/turbotax-tax-filing/turbotax-tax-software/
For more information, go to http://bestirstaxrefund.com/tax-deduction-tips-for-new-homeowners
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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