April 2007
"Homeowner Expenses You Can (and Can't) Deduct at Tax Time"
You know that your home is an asset and affects your net worth in a very positive way - but did you also now there are tax benefits to owning a home? One of the most significant ways to reduce your annual income tax by offsetting income is through deducting homeowner expenses.
Here's what you can deduct:
1. Home loan interest on your primary residence
2. Home loan interest on your second home
3. Interest on home improvement loans or home equity loans
4. Points and origination fees paid at closing
5. Points paid for a refinance
6. Real estate taxes Community assessments for maintenance or repair
Here's what you can't deduct:
1. Homeowners insurance (this is non-deductible even if it's escrowed as part of your monthly payment)
2. Mortgage insurance State and/or community charges (water, garbage collection, etc.)
3. State and community assessments that improve your property (i.e., sidewalks)
4. Homeowners association fees
5. Lender fees at closing (appraisal fees, document preparation fees, etc.)
Be sure to hold onto all of the following to get full advantage of these tax breaks:
1. All paperwork regarding the purchase of your home(s)
2. Records of home improvement
3. Records of home business expenses, if applicable
4. Tax returns from the years during which you bought and/or sold a home
5. Your interest and tax statements
As always, check with your tax preparer or a CPA before making any decisions. But if you're not yet a homeowner, call the credit union for a prequalification so that you can soon become one. You can reach your Great Basin FCU mortgage officer, Cindy at (775) 789-3109 or email her at cindyk@greatbasin.org.
