Can I Deduct My Real Estate Taxes ?
Real Estate Income Tax Deductions
Owning a home can reduce the amount you pay in income taxes each year. Your mortgage interest and property tax payments may be deductible from your federal taxes, as well as many state taxes. The are known as Real Estate Income Tax Deductions. Certain closing costs and loan discount points also may be tax deductible. In the early years of your mortgage, when interest represents the bulk of your monthly mortgage payment, these real estate income tax deductions can put a significant amount of money back in your pocket. And for all my customers and clients, the average length of time a first time home buyer stays in a home is 7 to 8 years before they are starting to look for an upgrade. We are not our parents or grandparents who stayed in a home for 30 years plus. So when the 8 years of interest starts dwindling on the loan and you are really into paying principle which is not deductible, you will probably be ready to move anyway.
What is a Legal Real Estate Income Tax Deduction?
Deduction for your:
- Main home
- Vacation homes
- Foreign property
- Personal use
You Can’t Deduct it for:
- Property you don’t own
- Rental property or business property (claim it as an expense, not a deduction)
- Local improvements, like streets or sidewalks
- Trash collection, library taxes, or anything else not directly related to property value
Some more important info about Real Estate Income Tax Deductions:
- Be sure to claim the deduction in the year you made the payment. So if you paid your 2017 property tax on December 14, 2016, claim it on your 2016 return.
- If you pay it with your mortgage, you can only deduct it after your lender has paid it on your behalf
- Co-op members: Only claim your share of the amount paid by the corporation
- Multiple owners: Split the deduction by what each person paid
- School taxes are deductible only if they are based on the assessed value of your property
authored by Andra Rosiello Matera cell 917-750-9855
Licensed Long Island Realtor
Charles Rutenberg Realty Plainview, NY 11803