Tax Rules

3 Tax Rules you need to Know if you Purchased a House Last Year!

Buying a house is a big investment

Buying a house can come with lots of hidden expenses. Maybe repairs you didn’t expect, higher utility costs and homeowner or neighborhood association fees. You can save some money on your taxes by taking advantage of tax credits and deductions.

Deduct Mortgage Interest and Property Tax

Tax benefits are available when you buy a home. You will be able to deduct mortgage interest and property taxes from your taxable income. Your lender will send you a 1098 form with mortgage interest information to use with your taxes for the year. If you paid your property taxes into your lender’s escrow account, that will also be on the form. If you pay directly to the county you are in, keep records of your payments to use come tax time.

Deduct Mortgage Insurance Premiums

If you put less than 20 percent down on your home purchase, you will be required to get mortgage insurance charged through your lender. Depending on your state and your borrower, it might not be that expensive.

Renewable Energy Tax Perks

Tax credits for building or owning an energy efficient home ended in 2021. Tax credits are available if your home uses renewable energy products. You can get up to a 26 percent tax credit if your home has geothermal heat pumps, small wind turbines, solar energy systems, fuel cells, and biomass fuel stoves.