Purchasing a home is a major life decision, but it’s one made easier by the many tax advantages available to homeowners. A few homeowner tax deductions that can have a significant effect on your taxes include:
In addition to these three, you can also benefit from a tax shelter on profits from the sale of your home. You also may be able to reduce their federal tax withholding in anticipation of lower tax bills related to future mortgage interest and property tax deductions. This can increase your take-home pay and make it easier to make your monthly payments.
1. The mortgage interest deduction
Often, the largest tax deduction for most homeowners is for mortgage interest paid throughout the year. Because this deduction can only be claimed for interest payments made during the tax year, first-time home buyers usually gain a larger mortgage interest deduction from purchases made early in