7 Tax Deductions & Credits for Your Home in 2016
One great advantages of owning a home are the tax deductions you may be able to claim. Houselogic published a great article about tax deductions that you surely don’t want to miss when it comes time to file in 2016.
Here’s a quick list of the top 7 Tax Deductions and Credits you should know about when filing your return.
- Mortgage Interest Deduction
- “Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible.” (Credit: Bankrate)
- Prepaid Interest Deduction
- “These costs are usually deductible in the year that you purchase the home; but if not, you can deduct them ratably over the repayment period.” (Credit: TurboTax)
- Property Tax Deduction
- “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.” (Credit: HouseLogic)
- PMI and FHA Mortgage Insurance Premiums
- “You can deduct the cost of private mortgage insurance (PMI) as mortgage interest on Schedule A if you itemize your return. The change only applies to loans taken out in 2007 or later.” (Credit: HouseLogic)
- Vacation Home Tax Deductions
- Deductions can be tricky but proper record keeping is critical here. View more about this at HouseLogic.com.
- Homebuyer Tax Credit
- While not a deduction, it is important to know when, if at all, this was claimed. See why at HouseLogic.com.
- Energy Efficiency Upgrades
- “The Nonbusiness Energy Tax Credit lets you claim a credit for installing energy-efficient home systems. Tax credits are especially valuable because they let you offset what you owe the IRS dollar for dollar, in this case, for up to 10% of the amount you spent on certain upgrades.” (Credit: HouseLogic)
For more information, and to read the full article in greater detail – go to Houselogic’s article here.
Of course, we are not tax professionals. Consult with your tax advisor to see which credits may apply for your individual circumstance before filing. Good Luck!
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