Homebuyer Tax Breaks To Remember For Next Year’s Tax Season
Did you become a new homeowner in 2015? If so, the last thing you want to worry about as you ring in the new year is your 2016 tax burden. As a new property owner there are real estate tax deductions that can help save you money.
This past summer a Senate committee approved tax extenders that included collecting tax related deductions and credits- giving tax payers a tax break through the end of the new year if the bill fully passes. Amendments of this bill can change what you owe come April. Let’s talk about the tax breaks and credits that you could quite possibly be benefiting from.
Credits for energy efficiency home improvements.
Making green improvements to your home has become a big trend in recent years. Not only do homeowners benefit from tax breaks, they also benefit from their home’s energy efficiency that helps reduce the cost of water, heating, and air-conditioning.
Deduction in state and local sales taxes.
Did you know that property taxes can be deducted? In addition, interest paid on your mortgage can also be a tax deduction.
Mortgage debt forgiveness.
When a mortgage lender writes off a debt the amount that the lender has forgiven is taxable for federal income taxes. In 2007 however the Mortgage Forgiveness Debt Relief Act allowed debt forgiveness amounts to be exempt. This act was meant to be temporary to help those struggling in the midst of the housing crisis, but Congress is considering renewing it for 2016.
Mortgage insurance premiums deduction.
Today many lenders require homebuyers to acquire private mortgage insurance (PMI) but up until 2015 taxpayers could not write off this cost like they could the interest of a mortgage. If this bill is extended homeowners will be able to write off their PMI in 2016 as well.