Tax Benefits Of Buying A Home Before The New Year – If you are interested or in the process of purchasing a home before the end of the year, know that there are several tax benefits you may want to take advantage of. Check out the tax benefits below of buying a home before the New Year.
Here are some ways in which the tax benefits break down:
1. Deductions in closing cost: A long list of deductions on your tax return is always a plus. If you close now, you may claim origination fees from your new loan.
2. Mortgage deductions: You may be able to deduct the interest from your mortgage, which might mean more money back to you, once taxes are filed. It works through a point system, equating one point to 1% of the principal of the loan. These fees can be fully deducted and included on the income tax deductions list you give.
3. Property tax deductions: Property taxes can be fully deducted too! This is one more reason to close now and take advantage of this annual deduction, so you don’t have to wait a whole year to do so. This can be done on your 1040 form.
4. Moving Costs: If you are going to be moving more than 50 miles away to a new home, you may be eligible to deduct a portion of your moving costs. However, there is also a commitment requirement, that makes sure you work a certain number of weeks in the new job, following your move, so talk to you tax accountant before considering this option.
5. Lock in Mortgage Rates: You may want to lock in 2015 mortgage rates now, in case 2016 rates go off the charts. By locking them in now, you will not be stuck forever with a higher rate. If the rates do drop, you can refinance. If you wait and rates increase, refinancing to lower your rate will not be an option. Smart financing will benefit your tax return for many reasons.
6. Get the Best Lending Option now: Lending rules are subject to change in a new year, which could resultant in less options for borrowing. It is up to you if you want to take the risk of waiting. These lending rules affect your financing options in addition to your tax deductions, so if there is one that meets your needs, lock in in now!
Owning a home before the New Year allows you to become eligible for many tax benefits. To maximize the benefits, consider talking to the experts; a finance advisor, tax accountant, or even your real estate agent. Make sure you get the most out of your purchase in order to ensure smart financial ownership of your home for the future.