Many first-time homebuyers may not realize how many tax benefits and deductions they can take advantage of. Our vLoan team gathered some information about what benefits could come your way when you purchase a new home.* Don’t let tax season be a stressful time of the year. It could turn out to be a great time for you as a homeowner and here’s why.
Capital Gains Exclusion
Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. Single folks and married tax payers who file separately get to keep up to $250,000 each, tax free.
The interest you pay on your mortgage is tax deductible, within limits. If you’re still paying your mortgage, you can file a deduction on the interest. If you pay PMI (private mortgage insurance), the premiums are tax deductible if your mortgage was taken out before 2006. You can also claim a deduction for any interest that you paid on any home improvement loans, as long as these projects increase your home’s value, prolong its lifespan or adapt to new uses.
Points on your mortgage
You can fully deduct points, or lender fees, associated with your mortgage loan. Refinance mortgage points are also deductible, but only over the life of the loan, not all at once.
Being green can bring you some green
Have you always wanted to live in a green, environmentally-friendly home? If you’ve made changes to your home to make it more energy-efficient and eco-friendly, you may be rewarded. Depending on what renovations you make in your home, you could receive a tax credit of up to $500 dollars from the Residential Energy Efficiency Tax Credit that the IRS has put in to place. Learn more about your homeowner tax deductions at wwww.irs.gov.
Are you looking for a mortgage for your new home or looking to refinance your existing mortgage? If so, please contact one of our mortgage advisors today. If you would like to see what mortgage options we have at vLoan, start a free online rate quote today. We can’t wait to hear from you.
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*Union Home Mortgage Corp. (DBA vLoan) does not provide tax, legal or accounting services.This material is for informational purposes only and should not be relied on for, tax, legal oraccounting advice. We recommend consulting your own tax, legal, and accounting advisorsregarding the costs and benefits of any potential transaction.