TAKE ADVANTAGE OF YOUR MORTGAGE'S TAX BENEFITS
Tax season is rarely a reason to celebrate, but scoring a bigger refund certainly is. That’s why you should love your mortgage during tax season. Here’s how your mortgage works in your favor come April 15th:
Just like your property taxes, the interest you pay every year on your mortgage is fully tax deductible. The newer your mortgage, the more interest you’re paying. That translates to big payouts from Uncle Sam for anyone with a newly purchased home or recent refinance.
Did you buy down your interest rate? The points you paid at closing are usually 100% deductible if you claim them in the same year in which you originated your mortgage.
3. PRIVATE MORTGAGE INSURANCE (PMI)
If you put less than 20% down on your home, chances are you have PMI. That insurance premium is tax deductible. The amount you can deduct depends on your income.
4. HOME EQUITY LINE OF CREDIT (HELOC)
Just like your mortgage, you can deduct the interest you paid on your HELOC. The IRS, however, sets limits on how much you can deduct depending on the HELOC amount and how you used the funds.
Laws vary from state to state and you may not qualify for all deductions depending on income and other factors. No matter your particular circumstances, your home is working hard to get your money back where it belongs – in your wallet.
*This article provides general information about tax returns, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.