Some Americans have just bought a new home, and the IRS knows that this purchase can be really expensive. However, the Agency reminds taxpayers that if you have just bought a new home, you should take into account tax breaks that could help you save money. As a matter of fact, many Americans are eligible for deductions, tax credits, and part of them for housing allowances.
These IRS tax credits and deductions can definitely help you with the high cost of homeownership. Here are the potential tax benefits taxpayers may qualify for when they have recently bought a new home in the United States. Taxpayers in this situation should definitely review any tax deductions, housing allowance, and other programs.
IRS deductible house-related expenses
Unfortunately, not many Americans can buy a new home without a mortgage. Having so much money to be able to afford a house in a lump sum. So, most Americans who have just bought a new home must take out a mortgage.
Once the mortgage has been accepted, homeowners must make a monthly payment to the mortgage holder, which may bundle other home-related costs. The IRS recommends itemizing their deductions to deduct homeownership expenses.
But what are the costs the homeowner can deduct? In the first place, state and local real estate taxes, which are subject to the $10,000 limit. This is not the only possible deduction.
Actually, homeowners can also deduct home mortgage interest, of course, as long as you meet the requirements and within the allowed limits. Not everything is deductible; the IRS has made a list of things homeowners can’t deduct.
IRS reminds homeowners what they can’t deduct
Here’s the list of thing homeowners cannot deduct:
- Insurance; including:
- fire
- comprehensive coverage
- title insurance
- The amount applied to decrease the principal of the mortgage
- Wages which homeowners paid to domestic help
- Depreciation
- The cost of utilities, such as gas, electricity, or water
- Most settlement or closing costs
- Forfeited deposits, down payments, or earnest money
- Internet access or Wi-Fi system, or service
- Homeowners’ association fees,
- condominium association fees
- common charges
- Home repairs
If you have not bought your house yet, but you are about to, have a close look at the Mortgage Interest Credit. It helps people with the lowest income afford homeownership.
If you qualify for the Mortgage Interest Credit, you can actually claim the credit each year. Of course, it is possible to do so for part of the home mortgage interest paid.
Often, homeowners may be eligible if they were issued a qualified Mortgage Credit Certificate from their government (local or state). Another thing you should get information about is the Ministers and military housing allowance. Make use of it if eligible in order to save money.
Source:
https://www.irs.gov/newsroom/potential-tax-benefits-for-homeowners
