INDONESIAKININEWS.COM - Owning a home is possibly the final step towards achieving the American dream. Whether it's your dream house or...
That being said, first-time homeowners should familiarize themselves with authorized deductions and programs that could help them with homeownership. There are various housing allowances that could be beneficial to them.
What homeowner expenses are deductible in your tax return?
With regard to homeownership, the IRS provides buyers with a wide berth, with the organization classifying anything from a house, condominium, cooperative apartment, mobile home, houseboat or house trailer that contains a sleeping space, toilet and cooking facilities as home.
In order to purchase any of the above, most buyers take out mortgage loans and then make monthly payments to the mortgage holder, which in most cases is bank.
While making the aforementioned payments some of the costs associated with home ownership can be deducted. These include:
- State and local real estate taxes, subject to the 10,000 dollar limit
- Home mortgage interest, within the allowed limits
- Mortgage insurance premiums
- Non-deductible payments and expenses
However, the following is a list of payments and expenses that are non-deductible:
- Insurance, other than mortgage insurance, including fire and comprehensive coverage, and title insurance
- The amount applied to reduce the principal of the mortgage
- Wages paid to domestic help
- Depreciation
- Utilities, such as gas, electricity, or water
- Settlement or closing costs
- Forfeited deposits, down payments, or earnest money
- Internet or Wi-Fi system or service
- Homeowners' association fees, condominium association fees, or common charges
- Home repairs
- Authorized deduction programs
What other programs can help new homeowners?
The following are some of the programs homeowners can look into to help them receive certain deductions:
- Mortgage interest credit: This program is meant to help individuals with lower incomes achieve homeownership. Those who are eligible can claim the credit each year for part of the home mortgage interest paid.
- Homeowners Assistance Fund: This program is aimed at providing financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services.
- Minister's or military housing allowance: Ministers and uniformed service members who receive a non-taxable housing allowance can still deduct their real estate taxes and home mortgage interest.
Source: marca
