If you are a first time homebuyer that is lucky enough to find a house you can afford in our current crazy housing market, you may be wondering what that will mean for your taxes. This can be a life changing step in many different ways. One that many might not realize at first is the impact owning your own home can have on your taxes each year. Mark Dicus & Company is here to talk about how buying our first home can impact your taxes.
How Does Buying a House Affect Your Tax Return?
Following are some of the ways that buying that new home can impact your taxes in a positive way.
– Mortgage Interest Deduction: It can be a big shift to go from paying rent to paying a mortgage. Sometimes, the mortgage is higher than you are used to paying for your housing each month. That being said, you will be able to deduct all of the money that you are paying on interest when tax season rolls around. At the beginning of your loan, there is a good chance that a decent portion of your mortgage payment every month is going toward interest rather than the principle. This can help lessen that blow.
– Real Estate Tax Deduction: You will also be paying for real estate taxes now. All of the money that you pay on real estate taxes is tax deductible as well. You can expect your real estate taxes to do nothing but climb, however, you can rest easy knowing that it is just a bigger deduction later.
– Charitable Donation Deduction: You don’t think about charitable donations at first when you think about your new house and taxes. However, if you have been making charitable donations every year to a foundation or your church, you more than likely will be able to deduct if from your taxes now that you are doing itemized deductions. It is very possible that you haven’t been able to qualify for itemized deductions in the past. However, now that you are paying mortgage interest and real estate taxes, they will more than likely get you to the $12,550 for single filers or $25,100 for married filers that is required to make a difference on your taxes.
– Home Improvements: If you are making improvements to your home now that it’s yours, you should save all of your receipts. You won’t be able to do much with them right now, but when you go to sell your home it can help make it less likely that you will have to pay capital gains taxes on your profit.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have questions about your tax return or filing your taxes, you can turn to Mark Dicus & Company to help you sort it all out. We can help ensure you’re taking advantage of all the deductions and credits that you qualify for. Call us today!