The deadline for filing your taxes is April 15th, which is less than a month away! Good news is that homeowners can cash in on some tax breaks during this season. Whether you just bought a home or have owned your home for many years, it always good to double check and make sure you are taking advantage of all the tax breaks and credits available.
Here are a few of the biggest tax tips for homeowners:
Claiming mortgage interest paid is one of the biggest tax deductions, particularly for the first few years of homeownership. This counts for first and second mortgages as well. All interest is deductible unless your loan is over $1,000,000.
Mortgage Insurance & Taxes
If you put down a smaller down payment, chances are your lender required you to take out private mortgage insurance (or PMI). Those payments are deductible as well. You can also itemize your property taxes. If you purchased the property within the year, you can find the amount of taxes paid on your closing statement (If you can’t find it, contract your Realtor who will have a copy).
If your lender charged you points when originating your loan you will be able to deduct that cost as well. One point is 1% of the loan amount. If your loan was for $500,000, a 1% fee would be $5000. You can deduct the entire amount of points paid over the year.
Energy Efficient Upgrades
Did you take advantage of any energy saving upgrades this year? If you installed solar electric equipment, solar hot-water heaters, or other alternative energy equipment than you may qualify for a 30% credit. Be sure to have those receipts handy!
Own a vacation home? Don’t forget to include it in your taxes this year! You can deduct many of the costs associated with owning a vacation home including real estate taxes, property tax, mortgage interest and points.
Be sure to consult with a licensed accountant to be sure you are eligible for the available tax breaks and credits. For more info on local taxes for Los Angeles click HERE.