Tax day is a month away (cue the ominous music). Wait, you say, tax day is April 15, right? This year Americans get three extra days to file, due to the observance of Emancipation Day in Washington, D.C. This post is the first of a four part series on taxes and homeownership as you file your taxes for 2010 or plan for 2011.
The Cans and Can’ts of Deductions for Homeowners
For homeowners, mortgage interest, points paid on that mortgage as well as private mortgage insurance (PMI) payments can be deductible. Also, property taxes you paid are deductible. These deductions can apply to original loans and refinancing a mortgage.
That’s the “can” part. There are some “can’ts” when it comes to homeowner tax deductions. As part of the Tax Relief and Health Care Act of 2006, tax deductions can be taken on PMI paid on mortgage loans taken AFTER January 1, 2007.
If you refinanced your home since January 1, 2007, any PMI you paid on the new loan can also qualify for a tax deduction. However, this only applies for refinancing a mortgage for the original loan amount, not for extra cash you might have included in the new mortgage loan.
One more caveat on homeowner tax deductions is there are income restrictions. The income cap is usually $100,000 for households filing jointly and $50,000 for married persons filing separately.
Tax Help for Homeowners
Your mortgage lender should send you tax related information. But even with that information in hand, taxes can be confusing. It’s not a bad idea to seek the help of a tax professional. LeaderOne is here to answer any questions you have about Austin Home Loans.