Ignite FB Tracking PixelTax Breaks and Deductions Every New Homeowner Needs to Know About - Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist

Tax Breaks and Deductions Every New Homeowner Needs to Know About

by Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist 10/07/2018

Buying your first home is probably one of the biggest purchases you’ll make in your life. But, it does come with its advantages. Among them are tax breaks and deductions that you can take advantage of to save money if you play your cards right.

In today’s post, I’m going to cover some of the tax breaks and deductions that first-time homeowners should seek out this tax season to help them lower their tax bill.

Mortgage points

While earning points is a good thing on the basketball court, it can be a financial drain on a mortgage. Mortgage points are what buyers pay to the lender to secure their loan. They’re usually given as percentage points of the total loan amount.

If you pay these points with your closing costs, then they are deductible. Taxpayers who itemize deductions on their IRS Form 1040 can typically deduct all of the points they paid in a year, with the exception of some high-income taxpayers whose itemized deductions are limited.

PMI costs

If you’re one of the many people who made a down payment of less than 20% on your home, odds are that you’re going to be stuck with PMI, or private mortgage insurance, until you pay off at least 20% of the loan balance.

The good news is that homebuyers who purchased their home in the year 2007 and after can deduct their PMI premiums. However, the state on premium insurance deductibles is something that frequently comes up in Congress, so homeowners should ensure that these deductions are still valid when filing their taxes.

Mortgage interest

Mortgage interest accounts for the biggest deduction for the average homeowner. When you receive your Form 1098 from your lender, you can deduct the total amount of interest you’ve paid during the year.

Property taxes

Another deductible that shouldn’t be overlooked by first-time buyers is local property taxes. Save the records for any property taxes you pay so that you can deduct them during tax season.

Home energy tax credits

Some states are offering generous tax credits for homeowners who make home improvements that save energy. There are a number of improvements you might qualify for, including things like insulation and roofs, as well as photovoltaic (PV) solar panels.

IRA Withdrawals

Many first-time buyers withdraw from an IRA account to be able to make a larger down payment on their home or to pay for closing costs. In most other cases, withdrawing from an IRA will count as taxable income. However, if your IRA withdrawal is used toward a down payment or closing costs, the tax penalty is waived.


Keep these tax breaks and deductions in mind this tax season to help you save money and get a larger refund.

About the Author

Author
Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist
Born in Chicago, IL and lived in the Northwest Suburbs. Moved to Tempe, AZ to attend college at Arizona State University. Graduated with Cum Laude Honors93'. My 9-year previous career was mostly in Law Enforcement with the Attorney General's Office, Phoenix Police Dept., and The Maricopa County adult probation Department. Over 19 years ago, I moved to Marco Island to enjoy a lifestyle and pursue a career as a Realtor®. I started my real estate profession by working as an assistant to a Top Producer for over one year to gain valuable experience. During the past 19 years, selling real estate has become my passion. I have since become a Top Producer myself for the past 18years and ranked #25 in total sales for the State of Florida within the Berkshire Hathaway Florida Realty network 2015. I am committed to old-fashioned customer service, integrity, and professionalism. Awarded"Five-Star Customer Service Real Estate Agent" by Gulfshore LifeMagazine 14 years in a row. Numerous references are available upon request of my satisfied past and current clients. In June of 2016, Suzan retired from a 25 year career in women’s retail and joined her husband Jon Busch in his Real Estate business. Suzan was a District Sales Manager for White House-Black Market traveling to stores in Florida, the Caribbean, and at times all over the Southeastern United States. Her work life was all about being in the field traveling and managing up to 72 stores. She worked with her Store Teams to maintain the corporate vision and customer service level they are known for. As a native of Collier County, it was a dream job for someone growing up in such a small town (Naples) area! After 25 years it was time for something new and what better way to transition from selling women’s clothing and customer service than to go straight into selling Real Estate. It has been an amazing transition. Interacting with our customers is the best part! She has gotten her Marco Island Specialist Certification and loves to do Open Houses. She is great at meeting new people, getting to know them and helping them find their Marco Island dream home and life style! *Awarded #25 Realtor in the BHHS Florida Realty network in total sales for 2007 and 2015! •Certified Fine Homes Specialist, Property Disclosure, Fair Housing, real estate and Anti-trust. •Winner of Leading Edge Award for 2003, 2008, 2009, 2011, 2012, 2014, 2016,and 2017. Honor Society Award for 2001,2002, and 2010. Winner of Chairman Circle Gold Award (top 2% of Realtors) for 2004, 2005, 2006, 2007, and2015. •Realtor Board member of the Professional Standards Committee, since 2002. •Bachelor of Science Degree in Justice Studies, Minor in Pre-Medicine, Cum Laude Honors at Arizona State University, 1993. •Ed Klopfer Real Estate School Graduate 1999. •Advisory Board Member for Marco Island Prudential Florida Realty Office 2001,2004, 2005. •President Circle Award for top 2% in Sales within Berkshire Hathaway Realty Florida network 2016. •Sales Leader for 1st Quarter of 2018, in the Marco Island Branch Office. Certifications and Recognitions •REALTOR® licensed salesperson •Member of the Marco Island Board of Realtors •Associate member of the Naples Board of Realtors •Member of FAR (Florida Association of Realtors) •Member of NAR (National Association of Realtors) •e-Pro Certified • Marco Island Specialist certification MIAAR on May 30, 2014