There can be many real estate ownership tax benefits. Deductions reduce your taxable income and thus lead to lower taxes owed. It is important to understand the tax implications prior to purchasing real estate or when weighing renting versus owning. This blog post provides details on real estate ownership tax benefits in Bennington.
Tax Deduction Eligibility
Not everyone is eligible for real estate ownership tax benefits in Bennington. When completing taxes, you may use the standard deduction or itemize your deductions, depending on which is higher. If you purchase an inexpensive property, the deductible items may not total more than the standard deduction. Other financial variables may matter as well. An accountant can offer a true understanding of the tax advantages of purchasing a property by taking into consideration your personal figures.
Property Ownership Costs that May be Used
Just the interest part of your loan payments are tax deductible. In the early stages of home ownership, you get charged more for interest than principal. Therefore, the total interest is more significant in that time period. Your loan provider will mail you a statement each year totaling the amount of interest.
Municipal taxes can also be tax deductible. Municpal taxes are an annual amount but are normally billed in smaller amounts. These taxes can be included in your mortgage payments, but be sure to keep copies of the tax bills forwarded directly to you. The figure in the statement by your mortgage company are sometimes not accurate, particularly if you closed on the house mid-year.
If you bought your property within a designated time frame and if you are under a specified income bracket, you can possibly deduct MI fees. MI is usually charged at settlement and on a monthly basis for mortgages higher than 80% of the purchase price and continues until the balance decreases to the 78 percent mark.
Points and Other Fees
Be sure to keep the original of your settlement statement. Some fees such as points, adjusted property taxes, and pre-paid interest can be deductible. Provide the information to your accountant.
Real Estate Ownership Tax Benefits In Bennington
The above real estate ownership tax benefits in Bennington is applicable to primary homes. If you have investment real estate, the possible deductions may not be the same. This is shared only as a basic introduction. Be sure to ask a tax consultant for solid guidance tailored to your individual situation.