This is your official reminder that you’ve got 27 days left to file your tax returns for the year 2016. (The date this year was pushed back three days to April 18th.) Home ownership is one of the best ways to save money on your taxes year to year, but if you’re not aware of all of the deductions that could help you, you may be leaving money on the table (or in the pockets of Uncle Sam.) Here is a list of some of the most common deductions that could save you hundreds on your taxes; for a full list or for special circumstances, be sure to contact a tax expert in order to ensure that you’re saving all that you can.
Mortgage Interest. If you pay a mortgage on a home, you can deduct mortgage interest up to one million dollars on a first or second home. If you’re single or filing separately, your limit is $500,000.
Home Equity Loan Interest. If you have a home equity loan you can deduct the interest up to a $100,000 loan. In order to be eligible though, be sure that you can document that the money was actually spent on home improvements.
Private Mortgage Insurance. If you put down less than a 20% down payment on your home, you’re probably paying private mortgage insurance, or PMI. That’s the bad news, but the good news is that the insurance is deductible. To qualify for the full amount, your adjusted gross income (AGI) must be under $100,000 and if your AGI is more than $109,000, you won’t be eligible to deduct it at all. But enjoy this tax break for the 2016 year because Congress recently let this one expire.
Real Estate Taxes. Also known as property taxes, real estate taxes are deductible. Just be sure you that you are only deducting what you actually paid in property taxes and not the extra amount you have sitting in escrow in your mortgage account.
Points. If you bought a home in 2016, you are most likely eligible to deduct the points associated with your mortgage. A point is equal to 1% of the loan amount and is considered pre-paid interest. You can even deduct points if they were paid for by the seller of the home at closing.
Selling Costs. If you sold a home in the past year, you may be able to deduct fees such as title insurance and real estate agent commissions.
If you aren’t sure what deductions you do and do not qualify for, be sure to contact a tax professional who can ensure that you’re saving all the money that you can.