Everyone knows that the interest you pay on your home loan is deductable. Are you aware that there are additional tax deductions that you can take on your principal residence or your second home? Some examples are your property taxes, and in some instances, for Mortgage Insurance. You will certainly want to talk to a tax professional before doing anything, however some points to ask about include:Possible Tax Deductions You Haven't Taken Advantage Of:Property Taxes. If you purchased your house in 2008, it's possible that you're allowed to deduct more than you realize. Make sure to remember to include real estate taxes you reimbursed to the seller - the reason is that these are taxes the seller already paid for the time you were actually the owner of the place after your purchase. That full amount will be shown on the settlement statement.Property taxes for taxpayers who opt to not itemize. Something new for the 2008 tax year; if you do not itemize deductions in 2008, you're allowed to increase your standard deduction by as much as $500 of real estate taxes paid in that year if you're filing as a single person, or by as much as $1,000 of property taxes paid if you're filing jointly.Mortgage interest paid on your primary residence, as well as any secondary residence you might own. (There are limits, but not many taxpayers actually are affected.)The interest on as much as $100,000 borrowed on a home-equity-loan or line of credit (HELOC), regardless of the reason for the loan.Points that were paid when you purchased the home (including those that you might have convinced the seller to pay for you).The premiums paid for Private Mortgage Insurance (PMI) in '08, but only for policies issued after '06. (The right to this deduction is going to disappear as Adjusted Gross Income goes up from $100,000 to $110,000 on a joint return, and from $50,000 to $55,000 for single returns.)Any home improvements necessary because of medical care.How much can you save?There are many factors that go into figuring out exactly how much money you will save:Your filing status (single, head of household, married filing jointly, married filing separately)The amount of your standard deductionAdditional itemized deductions you may have The amount of taxable income you showYour deductions that are home-related, in addition to your other itemized deductions, must total more than the standard deduction (increased by the amount of property taxes noted earlier that are allowed to non-itemizers), or else they won't save you money.What am I not allowed to deduct? You can not deduct the following payments on your primary residence:
Home Owners Association duesInsurance on your homeAppraisal fees paid for your homeCosts of improvements to your house. (But hang on to those receipts. They might help you minimize your taxes when/if you decide to sell your place.)Always remember be sure to consult witha tax professional. For additional information about home ownership in the Denver area, help with a Denver home mortgage purchase loan or Denver refinancing, visit this site: http://denverhomemortgageassistance.com/
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