Benefits of Homeownership at Tax Time

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/4ZGv

 

Benefits of Homeownership at Tax Time

 

It's tax time ... 

And that means it's time for you to gather all of those envelopes recently mailed to your home marked "Tax Documents Enclosed" and file your taxes for the year. 

If you became a new homeowner during the previous year ...

Your real estate professional and lender probably told you at the time of purchase that homeownership comes with tax benefits.  Well, now's the time to flex those tax benefit muscles.

If you closed your loan via my mortgage services during the previous year, you should have received a copy/CD of your Mortgage Closing Disclosure at the end of January.  Much of the information you'll need to prepare your taxes and maximize your tax benefits is available on that Disclosure.

Whether preparing and filing your own tax returns ... or paying to have them prepared for you by a professional tax preparer, it's wise to fully-educate yourself to the tax deductions available to you before you start.  That's especially true when you're a homeowner.

Please Note here:  I am a Mortgage Originator, not an accountant or professional tax preparer.  The information I provide below is to be used only as an alert and source of reference for mortgage-holding homeowners ... not construed as professional advice.  

Should you have questions or be in need of tax and filing advice, please seek the services of a licensed/registered tax preparer.  (If in need of a referral for a tax professional in the Will County - Chicago Southland area, please contact me.  I'll be happy to provide a referral to a qualified tax professional.

That said, if you're a new or mortgage-holding homeowner ... 

What are some of the tax deductions you may be entitled to?  

  • Property Taxes:  City or State property taxes should be deductible.  

       If a new homeowner: Consult with a Tax Adviser as to the ability to deduct any Prorated Real Estate taxes from the date of your Closing on.(Understanding that a Homeowners pays Real Estate Taxes in arrears for the previous Calendar year in the Chicagoland Area and Collar Counties.)  If taxes were paid at that time, the dollar amount should be noted on your Disclosure Statement.

 

  • Mortgage Interest paid during the year:  You should have received a form   (Form 1098) or something similar from your mortgage holder.  The Form will typically break down the monies paid during the year, any deductible points paid (including those seller-paid), and if/when paid, mortgage insurance premiums.

     If the home is a Second Home or Investment Property:
     Mortgage Interest can still be deducted, within guideline limits.

  • If the Mortgage closed was a Refinance:  You can still claim the interest as a deduction, but you will have to meet certain criteria to do it.  That criteria may include spreading the deduction out over a defined number of years or over the life of the loan.

The Points paid during your Refinance may also come into play, but prorations will be figured and utilized for tax deductions.

  • Points paid at the time of Closing:  These points could take the form of Discount Points or Origination Points. They also can include those Points paid for you by your Seller at the time of your Closing.
  • Mortgage Insurance Premiums:  (For those policies issued after 2006)  

    Mortgage Insurance Premiums that qualify include those provided by the:


       *  Dept. of Veteran Affairs (a/k/a Funding Fee)
       *  FHA - Federal Housing Administration 
       *  Rural Housing Service - USDA (a/k/a Guarantee Fee)
       *  Private mortgage insurance

  • The Internal Revenue Service (IRS) allows First-Time Home Buyers (if married, both spouses) to make penalty-free withdrawals from their traditional IRA (or Roth IRA) up to $10,000/each.

    The IRS also allows their parent, a child, or grandchild to contribute ... with the total contribution allowed being $20,000.  

  • Moving Fees:  Deductions may be allowed for some moving fees ... if the move was facilitated by a change of employment or new job position.  Specific IRS requirements must be met in order to use this deduction.  (Please inquire with your tax preparer as to these requirements or see IRS Publication 521 regarding Moving Expenses)
  • Transfer Taxes:  Transfer Taxes, if paid, can be written off.


Again:  The information above is meant to be used only as a tool and to alert you to deductions and possible monetary savings you may be allowed.  Hopefully, it also assists you in your own tax research or serves as a roadmap when asking questions of your tax professional. 

Bottomline, the good news is this:  If you're thinking of buying a home soon or in the future, there are savings (tax and otherwise) to be found when you buy, finance, and own a home.  

The first step to discovering the possibilities that exist for you when buying or refinancing in the Will County, Chicagoland, IL (and WI) area?  Contact me ... or your own local Lender.  I'll be happy to answer all your questions and assist you with your financing needs.

And please don't forget:  The deadline for filing 2016 Federal Income Tax Returns is April 18th, 2017 ...

Read:  How Your Tax Refund can Help You Become a Chicagoland Home Buyer

 Contact Me!
 
 
* Hoping to Buy or Refinance a Home in New Lenox, Will County, or elsewhere in the Chicagoland area? Contact me! I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt
 
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed
 
American Portfolio Mortgage Corp.
 
nmls #175656
 
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Debbie Reynolds 02/19/2017 11:29 AM
Topic:
Lending / Financial
Location:
Illinois Will County New Lenox
Groups:
Mortgages
Chicago Area Real Estate BUZZ!
1st Time Buyers
Buyer Information - What Buyers Need to Know in Today's Market
Bananatude
Tags:
tax deductions
tax time
income taxes
benefits of homeownership

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Rainmaker
1,166,184
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

It makes so much sense to buy rather than rent. By the time you are finished your payments may end up being the same. Start saving for that downpayment now. 

Feb 17, 2017 12:33 PM #1
Rainmaker
691,171
Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

Great post with tax season here a lot of individuals don't realize the benefits of owning a home. Thanks for sharing I hope you enjoy the weekend.

Feb 17, 2017 12:51 PM #2
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Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Gene - Great information for home owners. I'm always amazed when working with first-time homebuyers at how few are aware of these tax benefits. It's pretty fun to tell them about it. Have a great weekend!

Feb 17, 2017 12:58 PM #3
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Gene

New homeowners will appreciate this information - I find that may are not really aware of the possible tax benefits nor the impact they can have.

Have a terrific weekend - it's pouring rain here with another storm!!

Jeff

Feb 17, 2017 01:36 PM #4
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Anna Banana Kruchten - Phoenix Homes Sales
Phoenix Property Shoppe - Phoenix, AZ
603-380-4886

Gene excellent and informative post that will help a lot of home owners - especially first time home owners.  Enjoy your weekend!

Feb 17, 2017 02:45 PM #5
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene there are many advantages to owning a home, and the tax deductions are a big benefit.

Feb 17, 2017 04:25 PM #6
Rainmaker
2,800,246
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Gene, This is very good information ... to use as you say, as a tool.  I am ready to meet with my CPA in March ... the appointment was scheduled at the end of December. 

Feb 17, 2017 04:50 PM #7
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

This is  so timely, Gene. I think many can benefit from reading this post.

Feb 17, 2017 05:47 PM #8
Rainmaker
1,523,547
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

Gene, excellent information to share with us. The tax benefits of owning a home are wonderful. I always have fun telling first time home buyers about them. Often times they don't know there are write offs that come with owning a home. Great post. 

Feb 19, 2017 06:31 AM #9
Rainmaker
3,831,623
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good afternoon Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

Great post and so timely with getting our information together for our income tax preparation. I have taken our documentation to our CPA and so glad he has it!

Feb 19, 2017 11:35 AM #10
Rainmaker
773,882
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Great tips for homeowners at tax time! -Kasey

Feb 19, 2017 02:17 PM #11
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I feel like everybody loves a tax break just like everybody loves Raymond, to turn a phrase there. Love and light and all the best!

Feb 23, 2017 11:55 PM #12
Rainmaker
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Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Fort Worth, TX
Selling Homes Changing Lives

In Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi I trust!!!

Feb 27, 2017 12:44 AM #13
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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