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Homeowner Tax Breaks
One of the many perks of home ownership is big tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those breaks!
Mortgage Interest Deduction: Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away!
Home Office: There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.
Closing Cost: When buying a home there are many fees that lenders charge that may be deductible. For example, discount points which are used to buy down your interest rate may be deductible. Also any prepaid taxes paid on the settlement statement are deductible as well.
Certified Public Accontants: Whenever you reach a point where you begin itemizing deductions, it is best to have your tax returns prepared by a Certified Public Accountant. Internal Revenue Service rules and regulations can quickly become…confusing.
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