The summer months are a popular time to buy or sell a house. New homeowners should put reviewing the tax deductions, programs and housing allowances they may be eligible for on their move in to-do list.
Sure, here is an article on house-related deductions and programs for homeowners:
Homeowners: Review These House-Related Deductions and Programs
The summer months are a popular time to buy or sell a house. New homeowners should put reviewing the tax deductions, programs, and housing allowances they may be eligible for on their move-in to-do list.
Here is a look at some of the deductions and programs that homeowners may be able to take advantage of:
Deductible house-related expenses
- State and local real estate taxes: Homeowners can deduct the amount of state and local real estate taxes they paid during the year. The deduction is limited to $10,000 for homeowners who file their taxes jointly and $5,000 for homeowners who file their taxes separately.
- Home mortgage interest: Homeowners can also deduct the interest they paid on their mortgage loan during the year. The deduction is limited to the interest paid on the first $750,000 of mortgage debt for homeowners who file their taxes jointly and $375,000 for homeowners who file their taxes separately.
Non-deductible payments and expenses
- Insurance: Homeowners can’t deduct the cost of insurance, such as fire and comprehensive coverage and title insurance.
- The amount applied to reduce the principal of the mortgage: Homeowners can’t deduct the amount of their mortgage payment that is applied to reducing the principal of their loan.
- Wages paid to domestic help: Homeowners can’t deduct the wages they pay to domestic help, such as a housekeeper or nanny.
- Depreciation: Homeowners can’t deduct the depreciation of their home.
- The cost of utilities: Homeowners can’t deduct the cost of utilities, such as gas, electricity, or water.
- Most settlement or closing costs: Homeowners can’t deduct most of the settlement or closing costs they paid when they purchased their home.
- Forfeited deposits, down payments, or earnest money: Homeowners can’t deduct any forfeited deposits, down payments, or earnest money they paid when they purchased their home.
- Internet or Wi-Fi system or service: Homeowners can’t deduct the cost of their internet or Wi-Fi system or service.
- Homeowners’ association fees, condominium association fees, or common charges: Homeowners can’t deduct the cost of their homeowners’ association fees, condominium association fees, or common charges.
- Home repairs: Homeowners can’t deduct the cost of home repairs, unless they qualify for the home improvement credit.
Mortgage interest credit
The mortgage interest credit is a tax credit that helps homeowners with lower incomes afford home ownership. The credit is equal to 20% of the home mortgage interest paid, up to a maximum credit of $2,000. To qualify for the credit, homeowners must meet certain income requirements and have a mortgage of no more than $750,000.
Homeowners Assistance Fund
The Homeowners Assistance Fund (HAF) is a program that provides financial assistance to eligible homeowners who are facing financial hardship. The HAF can be used to pay for mortgage payments, property taxes, utilities, and other housing-related expenses. To be eligible for the HAF, homeowners must meet certain income and property ownership requirements.
Minister’s or military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don’t have to reduce their deductions based on the allowance.
These are just a few of the deductions and programs that homeowners may be able to take advantage of. To learn more about the deductions and programs that you may be eligible for, it is important to consult with a tax advisor.
I hope this article was helpful.