5 Powerful Tips for Getting Property Related Tax Deductions!

Like Healthcare, Childcare Tax credit there are several tax deduction and credits that extend to owning a residential home mortgage. Some of these deductions have been around for a while, however some of them have been revised and extended due to new Covid-19 related tax laws. Below are some 2021 Tax deductions and credits for individual taxpayers. Lets take look at them

1. Mortgage Insurance Premiums Deduction

You maybe able to deduct thousands of dollars from your monthly mortgage that covers Private Mortgage Insurance (PMI). This deduction is subjected to qualified taxpayers’ AGI limits, property purchase date, and the equity in your home. According to the IRS, you can treat amounts you paid during 2021 for qualified mortgage insurance as a deduction. The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006. PMI tax deduction is only possible if you itemize your federal tax deductions.

2. Mortgage Interest Deduction

Mortgage interest deduction is a great tax incentive for homeowners. Mortgage Interest Deduction allows interest paid on a loan secured by your main home, second home, and/or investment property to be deductible. You may also be able to take a credit against your federal income tax for certain mortgage interest if a mortgage credit certificate (MCC) was issued to you by a state or local government unit or agency. Its important to note, laws have changed on limits amount that could be deducted

3. Closing Cost

Unfortunately, closing cost such as title insurance, credit report, and third-party fees are not tax deductible. However, you can right off any points you paid to reduce your interest rate and any real estate taxes you might have to pay upfront.

4. Residential Energy Credit

The Residential Energy Credit is designed to encourage consumers to make energy-efficient home upgrades. Homeowners can get credit for energy-saving improvements to their primary home. Eligible energy-efficient improvements may include:

• Solar Windows

• Roof

• Insulation

• Insulation

• Water heaters

5. Property Taxes

Property tax deduction is another benefit many homeowners enjoy owning a home. The property tax deduction allows homeowners to deduct their real estate taxes from their federal taxes each year. You’re allowed to deduction up to 10,000 in state and local property if you’re single, a head of household or $5,000 if you’re married and filing separately.

Find More About Your Eligibility?

If you would like to learn more about your tax deduction, contact us today for a free consultation 512-354-7878.