Tax Credits For Buying A House In 2022 : What Are You Eligible For?

Table of Content

• What Are the Chances of the $15,000 First Time Home Buyer Tax Credit Act Passing?
• Should I do my own taxes if I bought a house?
• Mortgage Insurance Premiums Deduction
• Rental expenses deduction
• Tax tips for taxpayers to consider when selling their home
• Gains

Add up the total amount of eligible expenses across all of the deductions that apply to you. Then, compare that number to the standard deduction amount you qualify for. If your total itemized deduction amount doesn’t exceed the standard deduction amount for your tax filing status, then it doesn’t make sense to itemize your deductions. Homeowners with an adjusted gross income up to $100,000 (or up to $50,000 if they’re married and filing separately) can deduct their mortgage insurance premiums. However, if your AGI is more than $109,000 ($54,500 if married and filing separately), you can’t deduct your mortgage insurance premiums.

You cannot file a joint return unless/until you are married. If you got a VA home loan and paid a VA funding fee, or paid a USDA guarantee fee as part of a USDA home loan in the tax year you’re filing for, you can include it as a deduction. The IRS considers these fees to be forms of mortgage insurance and allows you to deduct them even if you didn’t pay the fee upfront and instead rolled it into the loan amount. The same deduction limits apply to the interest paid on home equity loans and home equity lines of credit . To take advantage of tax deductions, you need to research and identify which deductions apply to you before filing your taxes. The available tax deductions can change each year, as can your financial situation, however some homeownership expenses are simply not going to be deductible.

What Are the Chances of the $15,000 First Time Home Buyer Tax Credit Act Passing?

Homeowners excluding all the gain do not need to report the sale on their tax return. Alternatively, you will have personal records in the form of a check or automatic transfer if you pay directly to your municipality. Be sure to include payments that you made to the seller for any prepaid real estate taxes . You can deduct your home mortgage interest on the first $750,000 ($375,000 if married filing separately) of mortgage debt. The old limit—$1 million ($500,000 if married filing separately)—applies if you bought your home before Dec. 16, 2017.

You can deduct the interest you pay on up to $750,000 of mortgage debt ($375,000 if married filing separately). If your mortgage is $250,000, you don’t need to worry about this rule. If your mortgage is $1 million, be aware that you can’t deduct all your mortgage interest. Because our hypothetical homeowner makes the median income in their area, they may qualify for an MCM. With a $177,660 mortgage x 4.5% interest rate x an MCC percentage of 20%, our homeowners could claim $1,598.94 in credit on their tax return.

Should I do my own taxes if I bought a house?

Of course, it’s worth the hassle when you see how much money you might save. If you rented in the past, all of your money went to a landlord, and none of it came back to you as a tax deduction. By authorizing H&R Block to e-file your tax return, or by taking the completed return to file, you are accepting the return and are obligated to pay all fees when due. DE, HI and VT do not support part-year/nonresident individual forms. Most state programs available in January; software release dates vary by state.

When most people think about homeownership, they think about the numerous benefits that come with it. These benefits can include increased financial stability, a place to call your own, and a valuable asset that can be used as collateral for other investments. However, for many people, the biggest barrier to homeownership is the upfront cost.

Mortgage Insurance Premiums Deduction

Another type of homebuyer tax credit is known as the "mortgage interest deduction." This deduction allows homeowners to deduct the interest they pay on their mortgage from their taxable income. This can result in significant savings, particularly in high-tax jurisdictions. The amount of interest that can be deducted depends on several factors, including the amount of the mortgage and the taxpayer's income bracket. Homeowners can also deduct points paid on their mortgage from their taxable income. The credit amount ranges from 10% to 50% of mortgage interest paid during the year.

Yes, if you move or sell your home within four years using the program, you’re required to pay back at least some of your tax credit. Eligible home buyers must earn an income that’s no more than 60 percent above the median income for the area. For example, in Columbus, Ohio where the median income is $60,000, home buyers who file their taxes as a single-earner may not have a household income of more than $96,000 per year.

The Nonbusiness Energy Property Credit expired at the end of 2021. However, the Inflation Reduction Act revives, enhances, and renames the credit—now the Energy Efficient Home Improvement Credit. The bill also extends the credit to Dec. 31, 2032, with the new rules applying to property placed in service after Dec. 31, 2022 . Consumers might qualify for $10,000 or more in tax breaks and rebates.

In this example, the credit would be reduced by 50% and the first-time home buyer could claim $7,500 on its tax returns. You should spend some time looking into your tax deductions if you are buying a house. A tax expert should be consulted if you need assistance with the specifics of your situation to make sure you are taking full advantage of all the tax breaks that are available to you. The First-Time Homebuyer Act of 2021 authorizes federal tax credits of up to $15,000 for first-time homebuyers. It applies to any home purchased after January 1, 2021, and there is currently no end date or cap in place.

Therefore, buyers who use the home buyer tax credit and change their primary residence or sell within four years of purchase will realize a tax liability based on how long they held their home. Why don’t you search for your next home with BHGRE HomeCity and take advantage of home buyer tax credits? Feel free to reach out to our qualified and experienced real estate agents for proper assistance regarding your home buying and selling needs.

If you refinanced your loan or took out a home equity line of credit , you receive a deduction for points over the life of the loan. Each time you make a mortgage payment, a small percentage of the points is built into the loan. You can deduct that amount for each month that you made payments. So, if $5 of the payment was for points, and you made a year’s worth of payments, your deductible amount would be $60. In addition, the amount excluded reduces your cost basis in the home. Fortunately, Uncle Sam has a few tax tricks up his sleeve to help you buy a home, save on home-related costs and sell your home tax-free.

Guide to First Time Homebuyer Tax Credits 2022 Updated Sage Jankowitz

Table of Content

• Private mortgage insurance (PMI)
• Mortgage interest credit
• Using Retirement Funds for a Down Payment
• Medically Necessary Home Improvements
• Mortgage Credit Certificate

If passed, the bill would provide a federal tax credit similar to the original first-time homebuyer tax credit that expired in 2010. For new homeowners already trying to adjust to the many costs involved in homeownership, tax credits offer welcome relief. However, the bill’s language is similar to another first-time buyer tax credit program – the First-Time Homebuyer Credit of 2009. That program required an additional IRS form to accompany the federal tax filing, and it’s expected that the 2021 version of the tax credit will do the same. To properly claim this tax credit, you must strictly abide by a number of regulations. You cannot claim the same deductions on Schedule A and for your home office, for example, in order to avoid paying taxes twice.

If you fall in the 32 percent tax bracket, multiply $9,000 by 0.32 to find that home ownership saves you $2,880. If you are in the 12 percent tax bracket, your savings would only be $1,080. One of the advantages of owning your own home is that you can write off the mortgage interest you pay. When you go from being a renter to a homeowner, you should adjust the withholding on your W-4 to reduce the amount of taxes taken out. This reduces the size of your refund and keeps more money in your paycheck.

Private mortgage insurance (PMI)

You cannot file a joint return unless/until you are married. If you got a VA home loan and paid a VA funding fee, or paid a USDA guarantee fee as part of a USDA home loan in the tax year you’re filing for, you can include it as a deduction. The IRS considers these fees to be forms of mortgage insurance and allows you to deduct them even if you didn’t pay the fee upfront and instead rolled it into the loan amount. The same deduction limits apply to the interest paid on home equity loans and home equity lines of credit . To take advantage of tax deductions, you need to research and identify which deductions apply to you before filing your taxes. The available tax deductions can change each year, as can your financial situation, however some homeownership expenses are simply not going to be deductible.

The $25,000 program for first-time home buyers is the Downpayment Toward Equity Act of 2021. Home buyers can potentially qualify for both programs and collect $40,000. If you use the tax credit to buy a home in 2021, for example, you may not use it again 2026. The program applies to all homes purchased beginning January 1, 2021.

Mortgage interest credit

You’ll transfer the total to Form 1040, instead of simply claiming the standard deduction. You should also receive a Form 1098 from your lender if you paid more than $600 in mortgage interest that year. The main tax benefit of owning a house is that the imputed rental income homeowners receive is not taxed.

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Using Retirement Funds for a Down Payment

Yes, if you move or sell your home within four years using the program, you’re required to pay back at least some of your tax credit. Eligible home buyers must earn an income that’s no more than 60 percent above the median income for the area. For example, in Columbus, Ohio where the median income is $60,000, home buyers who file their taxes as a single-earner may not have a household income of more than $96,000 per year.

If you’re looking for your first home, you should know that you can get a tax break for buying a house. The IRS encourages homeownership with several tax deductions and credits that you can claim, in most cases, year after year, as long as you own your home and use it as your primary residence. Both of these tax credits are extremely beneficial for first-time homebuyers. The tax credit for first-time homebuyers can help reduce or even eliminate the upfront cost of homeownership. The mortgage interest deduction can save homeowners thousands of dollars each year on their taxes.

Medically Necessary Home Improvements

The First-Time Homebuyer Tax Credit is the First-Time Homebuyer Act of 2021 and it offers a $15,000 tax credit to first-time home buyers that meet specific requirements. To take the deduction, you must itemize on Schedule A , and you can only write off medical costs that are greater than 7.5 percent of your adjusted gross income. Any increase in the value of your property also lowers the deduction. Therefore, if you install an elevator for $50,000 and it enhances the value of your home by $40,000, you can only deduct $10,000 ($50,000 – $40,000). If the update itself is medically required, costs for maintenance and operation of the upgrades are also deductible as medical expenses. However, if they aren't medically required, home modifications that merely make it easier for seniors to live in their homes (such as "aging-in-place" upgrades) aren't tax-deductible.

Note that the bill provides no specific guidance regarding the purchase of a home from an entity controlled by a relative, such as a trust. Each post is edited and fact-checked by industry experts to ensure that we are providing accurate information for our readers. If you have to sell your house early due to a divorce, a work shift, or another circumstance, you might be able to satisfy some of the residency requirements. Though the First-Time Homebuyers Tax Credit could be a great financial break for millions of Americans, there are some limitations to keep in mind.

Should You Adjust Your Tax Withholding?

You won't have to pay taxes on the first $250,000 of earnings if you owned and occupied the residence for at least two of the five years prior to the sale (i.e., capital gain). Furthermore, anyone applying for the First-Time Buyer Tax Credit must be 18 years of age or older or married to an 18-year-old. The property in question may not be purchased from a relative, too. Again, this tax credit is not yet available for 2021 or 2022 home buyers.

In most cases, they’ll be able to offer thorough professional advice about the programs that exist and the application process. Finally, though they are not all tax credit programs, you can also apply for Freddie Mac, Fannie Mae and FHA loans. Each loan option allows you to benefit from a mortgage loan even with a down payment as low as 3%. For first time homebuyers, there is a refundable credit equal to 10 percent of the purchase price up to a maximum of $8,000 ($4,000 if married filing separately).

Mortgage Insurance Premium Deduction

You cannot claim the home office deduction if you work from home as an employee. Only those who regularly and solely utilize a portion of their house as their main place of business, including self-employed individuals, are eligible for the deduction. If your adjusted gross income is over $100,000, the deduction phases out and eliminates if it is over $109,000 ($50,000 and $54,500, respectively, if you're married but file a separate return). There is one more caveat, and it pertains to both subtracting points in the year you paid them and over the course of the loan. Itemizers must enter deductible points on either line 8a or 8c of Schedule A for 2021 returns . You will need a new MCC if you refinance your previous loan in order to be eligible for the credit on the new loan, and the credit amount may change.

Homeowners excluding all the gain do not need to report the sale on their tax return. Alternatively, you will have personal records in the form of a check or automatic transfer if you pay directly to your municipality. Be sure to include payments that you made to the seller for any prepaid real estate taxes . You can deduct your home mortgage interest on the first $750,000 ($375,000 if married filing separately) of mortgage debt. The old limit—$1 million ($500,000 if married filing separately)—applies if you bought your home before Dec. 16, 2017.

Mortgage Credit Certificate

The First-Time Homebuyer Tax Credit is different from another housing-related bill, the Downpayment Toward Equity Act, which was also introduced this year. The Downpayment Toward Equity Act proposes to pay $25,000 cash to eligible home buyers to offset closing costs, taxes, and interest. One exception states that home buyers who sell their home within four years to a non-relative, and whose real estate gains are less than their tax liability, must only pay their real estate gains.

For tax purposes, the custodial parent is usually the parent the child lives with the most nights. If the child lived with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income . In January 2022, the IRS sent Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021.

Is there a tax credit for buying a house in 2021 IRS?

Table of Content

• Is this program the same as the Biden First-Time Homebuyer Tax Credit?
• Tax Breaks When Buying A House For The First Time
• What can I write off when I buy a house?
• Thinking About Writing a Love Letter to the Seller of Your Dream Home? It’s Not Always a Good Idea
• Why is my tax refund so high 2021?
• What can I claim on my taxes working from home?
• Will Homebuyers Need to Apply for the Tax Credit?

The fee accompanies most home loans where lenders use the home as collateral for the mortgage. Mortgage interest typically comes at a fixed rate, an adjustable rate or a combination of both. The fixed-rate interest will charge the borrower a set percentage of interest over the duration of the loan. The adjustable-rate mortgage interest, however, fluctuates based on market behaviors. This means that the amount of interest you pay per month will vary.

If your mortgage lender pays your property taxes via an escrow account, you can only deduct taxes that have actually been remitted to the taxing authority. You might pay $200 a month to your lender toward escrow, but you can’t claim a tax deduction for that money until your lender sends it to your state or county. You can claim an itemized deduction for up to $10,000 in property taxes you paid per year, but restrictions apply here, too. This deduction applies to all state and local taxes you pay, not just property taxes.

Is this program the same as the Biden First-Time Homebuyer Tax Credit?

The insurance must be in connection with home acquisition debt issued after 2006. If your AGI is less than $100,000 ($50,000 if married filing separately), you’re eligible for the full deduction. If your AGI is higher than $109,000 ($54,500 for married filing separately), you can’t take the deduction. The maximum tax credit a borrower can receive is $2,000 per year. Let’s say you’re a homeowner who paid $7,000 in state income taxes but your property taxes were $6,000, bringing your total SALT bill to $13,000. You’ll only be able to deduct $3,000 of your total property tax bill to prevent your total SALT deduction from exceeding the $10,000 cap.

Additionally, you can be required to pay back all or part of the benefit you received from the MCC program if you sell the house before nine years have passed. When looking to take advantage of first-time home buyer assistance and tax credits, it's always good to inquire about how they define a 'first-time homebuyer' to see if you meet the requirements. Real estate transfer taxes can come due in some states when a house is sold, but home sellers, not homebuyers, are typically responsible for paying this tax. Most states do not impose a sales tax on home sales, but some states charge an additional “mansion tax” on homes with sale prices above a certain amount ($1 million, in some cases). If a homebuyer received $15,000 in tax credit when they bought their home, then were forced to sell the home due to a divorce or military transfer, the repayment penalty may not apply.

Tax Breaks When Buying A House For The First Time

You will get a credit for 20% of $10,000, or $2,000, on your 2021 tax return. You can then include the remaining $8,000 of interest in your itemized deductions if it benefits you to itemize rather than take the standard deduction. Property taxes are also a great avenue when it comes to deductions.

This is in contrast to a tax deduction, which reduces your taxable income. You must itemize to claim the mortgage interest or property tax deductions. This means completing and filing Schedule A with your tax return.

What can I write off when I buy a house?

But if you're self-employed, you may be able to deduct eligible home office expenses if you maintain a dedicated office in your home and maintain it as your principal place of business. Like the mortgage interest deduction, discount points are deductible on the first $750,000 of debt. The only downside is that your taxes will get more complicated. Gone are the days when you plug your W-2 information into the 1040EZ form and finish your taxes 10 minutes later. As a homeowner, you enter the wonderful world of itemizing.

It’s $12,950 for single filers, and $19,400 for those who file as head of household. If you’re single and own a home, you’d need at least $12,951 in itemized deductions to make itemizing worth your while. Otherwise, you’d be paying taxes on more income than you have to.

File

If it’s not included on your 1098, add this to your total mortgage interest when doing your taxes. For example, if you’re in the 24% tax bracket, your tax liability will be reduced by 24% of the total claimed deduction. So, if you claim a $1,000 deduction, you can expect your tax liability to drop by $240 ($1,000 × 24%). Whether you buy a mobile home, town house, condominium, co-operative apartment, or single-family home, several tax breaks can save you money at tax time. If the capital gain exclusion doesn't completely wipe out your tax bill when you sell your home, you can still reduce the tax you owe by adjusting the basis of your home.

However, improvements that simply make your home more elderly-friendly (such as "aging-in-place" upgrades) aren't deductible if they're not medically necessary. An ITIN is an identification number issued by the U.S. government for tax reporting only. You are required to meet government requirements to receive your ITIN. From retirement account contributions to self-employment expenses, learn more about the five most common tax deductions with the experts at H&R Block. This tax credit is nonrefundable, which means if the total tax you owe for the year is $1,500; you will not get a $500 refund. However, you can carry the unused $500 of your credit forward and apply it in one of the next three years.

One mortgage point, sometimes called a discount point, is equal to 1% of your loan amount. A Mortgage Tax Credit Certificate is a tax credit issued by the government directly to a homeowner that allows them to reduce their tax bill by a specific percentage of their mortgage interest. You may be eligible for a mortgage interest credit if you’re a first-time homebuyer, a military service member or are purchasing a home in an area targeted by the U.S. Targeted areas may have been identified as needing development or revitalization.

For example, you could deduct $5,000 in income taxes paid and $5,000 in property taxes. But if you paid $7,000 in income taxes and $5,000 in property taxes ($12,000 total), your deduction would still be limited to $10,000—that additional $2,000 isn’t tax-deductible. The deductions you itemize affect the total amount of income that the IRS taxes you on, whereas a tax credit reduces the amount of your tax bill that you pay. For example, if you made $50,000 per year and your itemized deductions totaled up to $12,000, you’d only have to pay taxes on $38,000 of income. On the other hand, if you owed $2,000 in taxes, and claimed a tax credit worth $1,000, you’d now only owe $1,000 in taxes. Text for the bill saysthat first-time homebuyers of a principal residence in the U.S. could claim a tax credit equal to 10% of the purchase price of the tax residence during that tax year.

Deductions are expenses that the IRS has agreed you can subtract from your taxable income so that when you pay your tax bill, you’ll pay less. The government wants to promote homeownership among Americans and offering tax deductions for some of the expenses related to owning a home is one way that it does so. Did you know that you can get a tax break for buying a house, as well as for many of the ongoing expenses of homeownership? You could stand to save thousands of dollars at tax time, but first you have to know which of your expenses qualify and whether you want to itemize your deductions or take the standard deduction. The new version of the first-time homebuyer tax credit hasn’t passed Congress yet, but there are some tax credits homeowners can take advantage of today.

Don’t lose hope, though — the deduction has expired before and been brought back many times since it was first implemented in 2006, and was available to taxpayers in every tax year between 2016 and 2021. If the bipartisan Middle Class Mortgage Insurance Premium Act of 2022 passes, it will make the deduction applicable to the 2021 tax year, as well as finally make the deduction permanent. There are numerous incentives and grants available to first-time buyers in various states. For example, many states offer down payment assistance programs for first-time homebuyers with certain income limits. Are there other tax-related programs for first-time home buyers. The First-Time Homebuyer Act of 2021 is designed for low- and middle-income households, and meant to build long-term wealth through real estate.

Tax Credits for Homeowners: What You Need To Know

Table of Content

• What home expenses are tax deductible 2020?
• Mortgage credit certificate
• Is this program the same as the Biden First-Time Homebuyer Act?
• Why is my tax refund so high 2021?
• Does buying a house count as a tax break?
• What deductions can I claim without itemizing?

You also may be able to deduct charitable donations, casualty and theft losses, some gambling losses, unreimbursed medical and dental expenses, and long-term care premiums. You must itemize your deductions to claim the mortgage interest deduction, mortgage points deduction, and SALT deduction. You can’t claim these deductions if you take the standard deduction when filing your tax return. According to the IRS, you can treat amounts that you paid for PMI as home mortgage interest.

If it’s not included on your 1098, add this to your total mortgage interest when doing your taxes. For example, if you’re in the 24% tax bracket, your tax liability will be reduced by 24% of the total claimed deduction. So, if you claim a $1,000 deduction, you can expect your tax liability to drop by $240 ($1,000 × 24%). Whether you buy a mobile home, town house, condominium, co-operative apartment, or single-family home, several tax breaks can save you money at tax time. If the capital gain exclusion doesn't completely wipe out your tax bill when you sell your home, you can still reduce the tax you owe by adjusting the basis of your home.

What home expenses are tax deductible 2020?

(The exact percentage is listed on the MCC issued to you.) The credit is limited to $2,000 if the credit rate is higher than 20%. However, if your allowable credit is reduced because of the limit, you can carry forward the unused portion of the credit to the next three years or until used, whichever comes first. PMI is usually required on conventional loans when homeowners have less than 20% equity in their homes. Whereas tax deductions reduce how much taxes you’ll pay indirectly, by reducing your taxable income, tax credits reduce your bill directly — they are dollar amounts subtracted from your tax bill itself.

But if you're self-employed, you may be able to deduct eligible home office expenses if you maintain a dedicated office in your home and maintain it as your principal place of business. Like the mortgage interest deduction, discount points are deductible on the first $750,000 of debt. The only downside is that your taxes will get more complicated. Gone are the days when you plug your W-2 information into the 1040EZ form and finish your taxes 10 minutes later. As a homeowner, you enter the wonderful world of itemizing.

Mortgage credit certificate

Worksheets included in Publication 523 can help taxpayers figure the adjusted basis of the home sold, the gain or loss on the sale, and the excluded gain on the sale. To claim the exclusion, the taxpayer must meet ownership and use tests. During a five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years. Lenders charge private mortgage insurance to borrowers who put down less than 20% on a conventional loan.

For example, you could deduct $5,000 in income taxes paid and $5,000 in property taxes. But if you paid $7,000 in income taxes and $5,000 in property taxes ($12,000 total), your deduction would still be limited to $10,000—that additional $2,000 isn’t tax-deductible. The deductions you itemize affect the total amount of income that the IRS taxes you on, whereas a tax credit reduces the amount of your tax bill that you pay. For example, if you made $50,000 per year and your itemized deductions totaled up to $12,000, you’d only have to pay taxes on $38,000 of income. On the other hand, if you owed $2,000 in taxes, and claimed a tax credit worth $1,000, you’d now only owe $1,000 in taxes. Text for the bill saysthat first-time homebuyers of a principal residence in the U.S. could claim a tax credit equal to 10% of the purchase price of the tax residence during that tax year.

Is this program the same as the Biden First-Time Homebuyer Act?

(For pre-2018 mortgages, interest on up to $1 million of debt is deductible.) Improvements are "substantial" if they add value to the home, extend the home's useful life or adapt the home for new uses. Basically, additions and major renovations are "substantial," but basic repairs and maintenance are not. How much you save from the tax benefits of owning a home depends largely on your filing status and income.

These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. The HOMES Rebate program rewards homeowners who cut home energy consumption through energy-efficient upgrades, such as insulation and HVAC installations. Residential energy property—These are energy-efficient versions of appliances that heat or cool your home, including heat pumps, central air conditioners, biomass stoves and boilers, and oil furnaces. It also includes energy-efficient water heaters and boilers and electric panel upgrades installed in conjunction with qualified energy property improvements.

The homebuying process can be quite strenuous, so it’s important to identify your financial situation and determine whether you need mortgage insurance. If you don’t think you’ll be able to make a 20% down payment on your first purchase, remember that numerous home loan and mortgage options exist. Finding the right option will just require a bit of thorough research. Check this overview of the many targeted loan programs available for first-time homebuyers.

Another type of homebuyer tax credit is known as the "mortgage interest deduction." This deduction allows homeowners to deduct the interest they pay on their mortgage from their taxable income. This can result in significant savings, particularly in high-tax jurisdictions. The amount of interest that can be deducted depends on several factors, including the amount of the mortgage and the taxpayer's income bracket. Homeowners can also deduct points paid on their mortgage from their taxable income. The credit amount ranges from 10% to 50% of mortgage interest paid during the year.

Does buying a house count as a tax break?

By increasing your take-home pay throughout the year, you can use your tax savings to cover monthly expenses. Before you adjust your withholding, you may want to consult your tax advisor. IRS rules can be complex; so can loan documents and tax forms. To make the most of your available tax benefits, consider meeting with your tax pro before buying a home to discuss potential tax breaks and how they might affect you.

Deductions are expenses that the IRS has agreed you can subtract from your taxable income so that when you pay your tax bill, you’ll pay less. The government wants to promote homeownership among Americans and offering tax deductions for some of the expenses related to owning a home is one way that it does so. Did you know that you can get a tax break for buying a house, as well as for many of the ongoing expenses of homeownership? You could stand to save thousands of dollars at tax time, but first you have to know which of your expenses qualify and whether you want to itemize your deductions or take the standard deduction. The new version of the first-time homebuyer tax credit hasn’t passed Congress yet, but there are some tax credits homeowners can take advantage of today.