As many of my clients know, I am a Clifton Park homeowner. Like most of you, I am getting ready to pay my taxes! Real estate has given me the opportunity to work with so many people and I have learned so many things.
As I prepare to pay my taxes, I would like to share a comment from one of the buyers I represented. He said to me: "You live in the only country in the world that pays you to own a home." I think about that statement so often and definitely during tax time. I know of no other country that allows the MID (mortgage interest deduction). My clients from Canada certainly told me they would miss that once they moved back to Toronto! How about the $8000 first time home buyer tax credit and the $6500 move-up buyer credit the government offered during 2009 and 2010?
I certainly appreciate low taxes just like everyone else but I am grateful for the deductions that I can take in regard to home ownership. Let me share a few of those with you but I do encourage you to seek advice from your tax consultant as I am a realtor and not a tax advisor!
Mortgage Interest Deduction- All your interest is tax deductible unless your loan is more than $1 million. (Those above the $1 million level must refer to IRS guidelines).
Home Equity Loans - also tax deductible within IRS guidelines.
Points paid to lower a mortgage rate - if you paid a point or points at closing to get a better rate on your loan, those points are deductible. Consult your tax advisor to determine exactly how much can be deducted and when (it differs if the loan was for a purchase or a refinance).
Property and School Taxes - also deductible. If you purchased this year, find your closing (settlement) statement. Be sure to give that to the professional doing your taxes. The statement should reflect the lump sum you paid at the closing for your share of the 2009 school and property taxes. For those of you who did not close this year, you already know that those taxes are a deduction!
Moving Expenses - If you moved 50 miles or more for a new full-time job, you may be able to deduct the moving expenses (packing, transporting or storing your belongings).
PMI - Private Mortgage Insurance
Taxpayers with adjusted gross income of $100,000 or less can fully deduct premiums for private mortgage insurance (PMI). The deduction is allowable only for insurance on loans that were originated after Dec. 31, 2006, and before Jan. 1, 2011. Again, seek the advice of your tax consultant.
I hope you have found this information useful! I invite you to visit www.irs.gov for more information. As always, I encourage you to always consult a professional when preparing your taxes - they know the laws, the deductions (others of which I have not even mentioned here) and have access to the most current forms and information!