There are normally many property ownership tax advantages in Mercer County NJ through use of tax deductions. Deductions reduce your taxable earnings and therefore lead to fewer taxes. It is helpful to understand the tax implication before purchasing or when analyzing renting versus buying. This article offers an explanation of Mercer County NJ property ownership tax advantages.
Tax Deduction Criteria
Not all home owners can claim tax deductions. When preparing your taxes, you can opt for the standard deduction or itemized deductions, whichever is more favorable. If you own an inexpensive Mercer County NJ home, the deductible amounts may not total more than the standard deduction. Other personal variables may affect this as well. Only an accountant can provide a true evaluation of the tax affects of purchasing a Mercer County NJ residence taking into consideration your personal situation.
Deductible Property-Related Expenses
Mortgage Interest
Only the interest part of your mortgage payments are tax deductible. In the early stages of owning a Mercer County NJ property, you pay more for interest than principal. As a result, the total deductible interest is significant when you first own a home than in subsequent years. Your loan provider will send you a statement each year totaling the mortgage interest paid on your Mercer County NJ property.
Municipal Taxes
Mercer County NJ real estate property taxes may also be tax deductible. Real estate taxes are an annual amount but are commonly invoiced in quarterly increments. These taxes can be included in your mortgage statements, but file copies of the property tax bills sent directly to you. The amount in mortgage statements may not include the full calendar year.
PMI
If you purchased your Mercer County NJ property within a special period of time and if you are under a qualifying income range, you can possibly deduct private mortgage insurance payments. PMI is invoiced on a monthly basis for mortgages more than 80% of the home value and does not disappear until the balance drops below the 80% level.
Points and Other Fees
Consider keeping a the original of your closing settlement statement. Certain charges such as points, adjusted real estate taxes, and pre-paid interest could be deductible. Provide the documentation to your tax consultant.
An Explanation Of Mercer County NJ Property Ownership Tax Advantages
The above is an explanation of Mercer County NJ property ownership tax advantages and addresses primary residences. If you purchased investment property, the possible deductions differ. This is meant solely as a simple overview. Always consult with a tax professional for expert information adapted to your individual situation or to your type of property.
Comments(0)