Ryan’s Mortgage Blog:
Quick update before I get to some tax write off tips. Straight from Yahoo news desk….“many economists predict the Fed will probably leave a key interest rate alone when it meets next on Aug. 5 — given all the economic crosscurrents. Boosting rates to fend off inflation would hurt the fragile economy and the already crippled housing market. On the other hand, the Fed isn’t inclined to lower rates because that would aggravate inflation.”
I know some may think it’s a bit late for some tax tips, OR maybe you’ll just be thankful it’s early for next year. Before I list the tips, I have a small disclaimer…I am not a tax professional and this information may not reflect current tax year rules and regulations. Please consult with your tax attorney for current regulations.
– One of the advantages of owning your own home is that the home mortgage interest and real estate taxes paid can be deducted from your federal income tax. To do so, you’ll need to comply with current tax laws and complete the appropriate federal tax forms and itemized deduction schedules. For your home mortgage interest to be deductible, it must be for a first or second mortgage, a home improvement loan or a home equity loan.
– Points (aka loan origination fees, loan discount, or discount points) are generally treated as pre-paid interest and, as such, the full amount can be deducted in the year paid on a purchase transaction. On a refinance, points must be deducted over the term of the loan.
– State or local real estate taxes can be deducted from your income if they are paid in the tax year. To qualify, the tax must be levied on the property’s assessed value, the taxing authority must charge a uniform rate for properties in its jurisdiction, and the tax must not be for your special privilege but for the benefit of the general welfare.
– Non-deductible items can include: Most settlement costs, including appraisal fees, notary fees, VA funding fees, and mortgage preparation costs. Insurance, Utilities and Depreciation are also non-deductible.
If you have any questions or comments, I can be reached at RBaker@PeregrineLending.com or 805-540-0866.