How does Owning a Home Affect my Taxes?

Most first time homebuyers have never done a tax return where they have to itemize deductions. Homeownership and all that it entails opens up a doorway for deductions that you weren't eligible for before. You will almost certainly find it to your advantage to itemize deductions. Don't worry: it's not difficult.

Instead of using the "standard deduction", you will complete "Schedule A" (for form 1040), and list both your mortgage interest, and your property tax payments. You may also be able to deduct some of your closing costs for tax year 2012.

Once you're itemizing, you may as well look for other expenses that may be deductible. For example, if you have medical expenses in excess of 7.5% of your income, you can deduct those, too. Make sure to consult with your tax professional or attorney to get the most deductions possible!

Cynthia Brower

Cynthia Brower

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