Tax Deductions You Might Have Missed by Dante Briggs

The interest you pay on your home loan is deductable. But are you aware that there are additional deductions that you can take on your primary residence or a second home? Some examples are your property taxes, and even sometimes, for Mortgage Insurance. You will surely want discuss this first with a tax professional before taking any action, but a few points to discuss include:Potential Tax Deductions You Have Missed:Property Taxes. If you purchased the house in 2008, it's possible that you can deduct more than you think. Do not forget to include all real estate taxes you reimbursed the seller for - taxes the seller had already paid for time you actually owned the place after your purchase. That full amount will show on the settlement sheet.Property taxes for taxpayers who decide not to itemize. New for tax year 2008; if you decide not to itemize deductions for '08, you are allowed to increase your standard deduction by up to $500 of real estate taxes paid in that year if you're filing as a single person, or by up to $1,000 of property taxes paid if you're filing jointly.The mortgage interest paid on your primary residence, as well as any secondary residence you might own. (Of course there are limits, but a relatively small number of taxpayers are actually affected.)Interest on up to $100,000 borrowed on a home-equity-loan or home-equity line of credit, regardless of the reason for the loan.Points that you paid to purchase the home (including those that you might have convinced the seller to pay).The premiums paid to PMI (Private Mortgage Insurance) in '08, but this is only applicable to policies issued later than '06. (The right to this deduction is going to disappear as Adjusted Gross Income goes up from $100,000 to $110,000 for those who file jointly, and from $50,000 to $55,000 for individuals.)Any home improvements needed for a medical condition.How much will the savings be?The actual savings you will see on your tax bill depends on a lot of factors:How you file (i.e. \single, head of household, married filing jointly, married filing separately…)Your standard deduction amountOther itemized deductions The amount of taxable income you showYour deductions that are home related, in addition to your other itemized deductions, need to total more than the normal standard deduction (increased by the amount of property taxes noted above that are allowed to those who don't itemize), or they will not save you any money.What is not deductable? You are not allowed to deduct the following expenses on your primary residence:-HOA dues-Home insurance-Appraisal fees paid for your home-Costs of improvements to your house. (But hang on to those receipts. They may be able to help you minimize your taxes when/if you should ever sell your place.)Always consult a tax professional. For more information about home ownership in the Sacramento area, help with a Sacramento home mortgage purchase loan Sacramento refinancing, visit the links provided.