Buying a home is a major commitment and expense and can have a major impact on your taxes for 2019. This purchase will either benefit their taxes for this year for most people, or have a neutral net effect. Whatever you think you owe–or owe–your taxes for 2019, it’s worth investigating some of the possible deductions and credits you might be eligible to see if you can lower your tax bill. It can make a big difference even a tiny deduction! Here are six ways you can affect your 2019 taxes by buying a house in Michigan City.
DEDUCT MORTGAGE INTEREST
If you own a home worth less than $750,000, you can subtract from your 2019 taxes the interest you pay on your mortgage.
This can add up to thousands of dollars per year for certain homeowners, which means you’re getting big savings. And if you also have a credit line of home-equity, the interest can also be reduced as long as the amount of both loans is less than $750,000.
DEDUCT SOME PROPERTY TAXES
You will completely subtract the taxes you pay on your 2019 taxes for those homeowners who pay less than $10,000 property taxes. The deduction includes both state and local property taxes, and adding these two line items must be less than $10,000 to qualify for a complete deduction.
If you live in an area where the combined taxes exceed $10,000, you can still deduct the first $10,000, which for many homeowners is a pretty solid piece of change.
You can deduct those points on your taxes if you paid points on your mortgage and actually exchanged money with your lender to do so.
So if you pay three points on a mortgage of $300,000 and each point is 1.5% of your overall mortgage, those points cost you $13,500. You will subtract $2,400 off your 2019 taxes if you make $200 contributions to those points per month.
DEDUCT PMI (IN SOME CASES)
If you have less than 20 percent equity in your home – this is the case for some first-time loans or other low-payment loans – you will have to pay Personal Mortgage Interest until that equity is built up.
You will subtract that on your 2019 tax if your adjusted gross income is below $100,000 for a married couple or $50,000 for a person if you have taken out your mortgage after 2007 and are paying PMI.
ENERGY EFFICIENCY TAX CREDITS
You may be able to get tax breaks for those changes if you purchased a home that was not doing so well in terms of energy efficiency and you made upgrades.
For those who made solar improvements to their homes between January 1, 2017 and December 31, 2019, you can subtract up to 30% of the cost of these installations on your 2019 taxes – both electric and water.
DEDUCT AGING IN PLACE EXPENDITURES
There are exemptions available for those who bought homes that needed improvements to make them more accessible as they age.
It is possible to deduct the cost of items such as wheelchair ramps or shower grip bars, used to make a home safer for older homeowners.
In addition, some homeowners may be able to deduct additional changes to make their homes more accessible, such as reducing the height of electrical switches and cabinets.
Professional, Experienced Help Buying a Home in 2019
If you’re thinking about buying a home before the end of the year, you may not fully consider how your 2019 taxes will affect the purchase. You can, however, be eligible for multiple deductions, reducing your overall tax bill. If you want to buy a house in Michigan City.