Posts Tagged tax deduction

Home owner tax deductions

Buying a home is one of the biggest ways to reduce your tax payment and start your long term savings and investment while enjoying the tangible benefits such as being able to live in it!  Buying a home is usually a person’s biggest investment, and also one that yields the most financial and tangible rewards.  There are good times as well as bad times to buy and sell real estate as pure investment (like stocks or anything else), but to me, it is NEVER a bad time to buy a HOME to live in.

 Here are some details about home owner tax deductions that yield tax saving benefits…

1. mortgage interest on a primary residence is usually fully tax-deductible, unless your mortgage balance exceeds $1 million or you took out a mortgage for reasons other than buying, building or improving a home. 

2. your lender will send you a 1098 that tells you how muchy mortgage interest you paid for the year.  you can record your interest deduction on line 10 in your schedule A, labeled “itemized deductions”.

3. real estate taxes are also fully deductible.  These taxes are approximately 1.14% in San Francisco, and are taxed annually based on the assessed value of your home. 

4. If you (or the seller) had to paid points on your mortgage, then the amount may also be deductible on the year that you purchased the property.

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