Do you own your own home? If so, are you aware of the deductions you can take at tax time? There are three major deductions available to homeowners when they file a return that can mean big savings when it comes to taxes.
- Mortgage Interest: if you have a mortgage for either your first or second home, and you have paid interest, you are able to deduct it as relevant up to one million in debt per couple. You should receive a Form 1098 from your mortgage lender which will report the full amount of interest you paid during the year. You will apply that amount on a Schedule A, the same place where you itemize deductions.
- Property Taxes: regardless of what type of property taxes you pay, city, local, county, or school, (and even if you pay all of the above) you are eligible to deduct the amount from your taxes. This amount also goes on a Schedule A, meaning you need to itemize to deduct it.
- Mortgage Points: using “points” to lower your interest rate doesn’t mean you paid a fee. Instead, you paid off some of the interest by paying it up front, which means its tax deductible. Points paid will also be listed on a Form 1098 in a separate box from your interest. Like the aforementioned deductions, you need to itemize on a Schedule A.
Ensure that as a taxpayer, you are doing all you can to maximize your savings at tax time. If you’re a homeowner, take advantage of the tax breaks offered just for you!