As a Kissimmee Tax Return Pro I always ask me clients, are now a homeowner? Congratulations, you finally have a place that you can call your own. Feels good, does it not? And you will feel even better when you realize the effects this can have on your taxes. The best part is that it does not matter whether you are buying a home for the first time or the second because a lot on incentives will be applicable in both situations.
Let us have a look at what tax advantages you get now that you are a homeowner.
If you have paid interest amounts on your mortgage
You probably have not bought your new home without taking a mortgage loan, right? And there is no mortgage that you can get without an interest. Your lender will provide you the 1098 form, which will provide you the exact interest amounts you have paid on the loan. If your total borrowed amount is less than a million dollars, you can deduct 100% of this interest. For married individuals who file separately, this amount is reduced to $500,000.
For individuals whose mortgage amounts cross the above mentioned limits, you will still get a deduction but that will be less than 100%. Keep one thing in mind; you cannot use any of these deductions until you itemize them on Schedule A. Once you are done with this, make sure you take the greater of your itemized and standard deductions. After this, go through the form thoroughly and only then file your tax return Kissimmee.
If you made any late payments or if you were charged a pre-payment penalty, you can deduct both of these.
If you have paid taxes on your property
Property taxes have to be paid each year, but the good news is that they are deductible. You will probably be paying them with your monthly payments. Your lender will be able to provide you more details about these on the yearly statement which he provides you with. Also make not of thing; this deduction is usually applicable to the federal return so you may not be able to avail it on your tax return Kissimmee or any other state. Ask your accountant and he will provide you with details in this regards.
If a lender forgave your loan
If there is any instance when a lender cancels your loan, it may be counted as an income on which taxes will be incurred. However, the Mortgage Debt Forgiveness Relief Act of 2007 has added exceptions to this. As long as your cancelled debt is less than $2 million, you are not charged taxes on it. For married individuals filing separately, this limit is $1 million.
This incentive is applicable only if the purpose of your loan was to purchase a home, improve your primary residence or refinance the mortgage on your primary home.
If you made your home energy efficient
If you have spent any amounts on making your home more energy efficient, you can enjoy a tax credit of 10%.
If you need more information about our Kissimmee accounting and tax services, please contact us at 407-344-1012. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.