Does Buying a Home Help With Taxes?
If you are thinking about purchasing a home or recently purchased one it’s good to understand more details on how this could affect your income taxes. This article will detail out some thoughts and observations on the matter.
The first item you would want to consider is whether you will take the standard deduction or itemize your deductions. With more recent tax reform the standard deduction was increased for single and married consumers. It was meant to simplify the preparation of a tax return and relieve the taxpayer of the onerous amounts of paperwork supporting itemized deductions.
When you own a home can include any points you paid in the year you purchased the home, mortgage interest paid during the tax year, private mortgage insurance (if applicable), along with property taxes paid. All these expenses coupled with other eligible deductible events can be possibly deducted but you should check to see if this amount exceeds the standard deduction about.
Disclaimer: You want to check with a professional tax advisor before filing a tax deduction on your return.
So, you will have to review your specific situation each year to see if there is even more benefit to itemize versus taking the standard deduction.
There is no doubt though that buying a home is a great way to build wealth. Make sure to talk to a qualified mortgage professional to put you in the right mortgage.