Buying a home is a big financial step, especially during peak buying seasons like summer. But there's good news! Homeownership comes with tax advantages that can help you save money and offset some of those costs.
Whether you're a seasoned homeowner or thinking about buying, understanding these tax breaks can be a big win. Let's explore deductions, programs, and allowances available to homeowners in 2024.
Most homeowners finance their purchase with a mortgage, which often bundles various ownership costs into the monthly payment. Here's what you can deduct on your taxes:
State and Local Real Estate Taxes: Deduct these taxes, but remember there's a $10,000 limit.
Home Mortgage Interest: This is deductible within certain limits.
To claim the deductions for state and local real estate taxes and home mortgage interest, you'll need to itemize your deductions on your tax return. This means you'll list all of your deductible expenses rather than taking the standard deduction.
However, there are some expenses related to homeownership that aren't tax-deductible. These include insurance premiums for fire, homeowners, and title insurance, payments that reduce the principal of your mortgage, utility bills for gas, electricity, and water, most closing costs, home maintenance and repair expenses, and homeowner or condominium association fees.
If you're a first-time homebuyer with a lower income, the Mortgage Interest Credit might be a helpful tax break. This credit allows you to reduce your tax bill based on the interest you pay on your mortgage. To take advantage of this credit, you'll need to secure a Mortgage Credit Certificate from your state or local government. These certificates are generally only available for new home purchases.
Want to learn more about tax breaks and maximize your savings as a homeowner or investor? Attend our free seminar on September 18th at the Kroc Center in Chicago at 5:00 PM. Register now at https://www.goldstarconnect.com/event-details/homebuyers-and-investors-seminar/form.
Happy homeownership!
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