Building equity is one of the many positive reasons to enter into home ownership, but with tax season upon us, now is a great time to think about all of the potential tax savings that can also come with owning a home. Regardless of if you are in the early stages of buying a home, or have owned your primary residence for decades, there are multiple potential tax incentives that you should consider taking advantage of that can help make the American dream of home ownership more affordable than you may realize.
Two of the major deductions home owners can take on their personal taxes are the interest paid on their home mortgage and their property taxes. Mortgage interest alone can be a major sum of money, so if you already own a home and aren’t deducting this, it would be a good idea to look into it for the future.
In addition to saving you money on your utility bills, energy efficient upgrades made to a home can also save you money on your taxes. These savings can change every few years, but the government’s Energy Star website has more information on the tax benefits of energy efficient home improvements.
For those that have purchased a home in the last year, another tax benefit they can receive is a deduction of the origination fees paid in the first year of their home mortgage.
As with any major financial decision, speak with a financial expert or tax consultant on weighing the tax benefits that come the purchase of a new home or the benefits you may already be eligible for through your existing residence.
Keep in mind that in order to take full advantage of all the tax benefits home ownership can provide, your personal taxes may become a little more complicated if you normally file using a 1040EZ. This does not mean that you’re going to need to hire an accountant, but you will need to itemize your tax deductible expenses to take full advantage of these benefits. In the end though, many find that the extra time spent on their taxes or the expense of using a tax preparer is well worth the cost because of the savings they receive.
To find the nearest HomeBridge branch near you, click here. We’re licensed across the country, so if there isn’t a HomeBridge branch near you, feel free to call us at 855-321-7366 and we’ll put you in touch with a Loan Originator licensed in your state.
A consultation with a mortgage professional is always free and there is never an obligation to work with us when you do decide to buy a home.