Tag Archives: tax deduction

6 Homeowner Tax Credits and Deductions to Use in 2015

irs tax creditsThere are many advantages to owning a home versus renting one. One of the most significant reasons is the tax savings owning a home provides. As the year comes to a close, here are some tax savings eligible homeowners can use for the 2015 tax year.

  • Mortgage Interest Deduction. This is a deduction you will claim on Schedule A. To take advantage of this deduction, your mortgage must be secured by your home. Interest you pay on a mortgage is deductible when you use the loan to buy, build or improve your home. This interest can be deductible on a mortgage of up to $1,000,000, or $500,000 if you and your spouse are filing separately. If you take a second mortgage on (via a second mortgage, a home equity loan, or a home equity line of credit), that will count toward the $1,000,000 limit. See more on this deduction at IRS.gov.
  • Mortgage prepayment penalty. If you pay off your home mortgage early, you may have to pay a penalty. The good news is that you can deduct the penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. See more on this deduction at IRS.gov
  • Property tax deduction. You can deduct real estate property taxes you paid at settlement or closing, or to a taxing authority during the year. Enter the amount paid on Schedule A. See more here.
  • Private mortgage insurance deduction. If you purchased your home with less than 20% down, you have to pay private mortgage insurance. This deduction was extended one more year, so if you meet the income limits, you can deduct the PMI you paid this year.
  • Energy tax credit. This is another tax credit that was extended another year. Homeowners are eligible for a tax credit of up to $500 if they make home improvements that save energy in their primary residences. Eligible improvements include things like replacing your roof, installing energy-efficient windows, or getting a new air conditioning system or furnace. Generally speaking, the credit is 10% of the cost of the improvements, up to $500, but of course, there are limitations.
  • Residential renewable-energy tax credit. In 2015, you may qualify for a federal tax credit for the purchase of certain geothermal heat pumps, small wind turbines (residential), solar energy systems and fuel cells. See EnergyStar.gov for details.

For more information on allowable tax credits and deductions, see the IRS’s 2014 guide for Tax Information for Homeowners. This will provide some guidance, but you’ll need the 2015 guide to help you prepare your 2015 guide. You will also want to consult your tax advisor to see which of the credits and deductions apply to you.


Owning a Home Can Save You at Tax Time

irs tax creditsI have good news and bad news. The bad news – April 15, tax time, is just around the corner. The good news – owning your own home can reduce your tax liability. Here are seven tax deductions that can save you money now!

  1. You can deduct home mortgage interest, up to certain limits, on Schedule A of your Form 1040.
  2. You may be eligible for deductions for discount points, loan origination fees or loan charges if you purchased or refinanced a home last year.
  3. Qualifying home mortgage insurance may be deductible.
  4. Local and state real estate property taxes are deductible on Schedule F of your Form 1040.
  5. If you sold a home last year, you may be able to deduct title insurance, advertising and real estate broker fees on your tax return.
  6. Did you move more than 50 miles for a job? A portion of your moving costs could be deductible. Certain limitations apply.
  7. Did you make energy saving improvements to your home last year? You might be eligible for a tax deduction or credit. Visit gov for more information.

For advice on your individual tax situation and eligible deductions, please contact your accountant. He or she can best advise you on which tax deductions apply to you.

Source: American Home Shield

HouseLogic: 9 Easy Mistakes Homeowners Make on Their Taxes

Avoid an IRS audit by recording homeowner tax deductions and credits properly.No one likes paying taxes. What’s even worse though is being audited by the IRS. A good way to avoid an audit is to be sure you understand home-related tax deductions and credits. Here are 9 common mistakes homeowners make, according to HouseLogic.com.

1.  Deducting the wrong year for property taxes

2.  Confusing escrow for the actual taxes paid

3.  Deducting points paid for refinancing

4.  Misjudging or miscalculating the home office tax deduction

5.  Failing to repay the first-time homebuyer tax credit

6.  Neglecting to record home-related expenses

7.  Forgetting to keep track of capital gains

8.  Filing incorrectly for energy tax credits

9.  Claiming too much for your mortgage interest tax deduction

To read more about these mistakes and how to avoid them, visit HouseLogic.com. Another good resource is your tax preparer, especially since the fiscal cliff has changed the tax landscape for 2012.