Biggest Homeowner Tax Deductions
Here are four of the the biggest homeowner tax deductions in 2015. Expect to receive a 1098 report from your lender with details. Other deductions are available. Check with your accountant!
1. Mortgage Interest Paid – Annual mortgage interest is tax deductible for first mortgages, second mortgages and home equity lines of credit. The deduction is for a primary residence and up to one second (vacation) home.
2. Discount Points – If you purchased or refinanced in 2015, you may have paid discount points to obtain a lower rate. One full discount point is equal to 1 % of the loan amount. The IRS classifies discount points as prepaid mortgage interest. Restrictions apply.
3. Property Taxes – Annual property taxes paid each year are also tax deductible for homeowners. If you purchased a property in 2015, you will want to keep track of your settlement statement which shows property taxes you paid at closing.
4. Mortgage Insurance – Mortgage insurance is required on loans purchased or refinanced with less than 20% equity. Some restrictions apply if your adjusted gross income is over $100,000.
This should not be considered tax advise. For tax-related questions, please speak with a licensed accountant or see IRS Publication 936.