If you're a first time Long Island NY home buyer, there are some tax deductions you'll want to be sure not to miss when filing your taxes this year.
If you're a long time seasoned Long Island NY homeowner, this probably won't be news to you. But a first time Long Island NY home buyer just might miss some of these deductions.
What a Long Island NY Home Buyer Can Deduct
Mortgage Interest – A new mortgage means you'll have a little more paperwork when it's time to file your taxes. However, the extra work is usually pays off. Perhaps the most important tax deduction a Long Island NY home buyer needs to be aware of is the mortgage interest deduction. At year-end, check out Form 1098 from your lender to see how much mortgage interest you've paid for the year.
Mortgage Points – Mortgage points are simply prepaid interest. You can buy points to lower your interest rate when you take out a mortgage. By purchasing points, you can save money in the long run if you stay in the home for a certain period of time, depending on the amount of points you purchase.
For example, if you have a $200,000 mortgage and buy two points, you'll cough up $4,000 for those points at closing. (Each point is 1% of the value of your mortgage.) If buying the points lowers your payment $250 a month, you'll have to stay in your home for at least 16 months to break even. After that time passes, you'll start putting money back in your pocket.
Are you eligible to deduct money you spent on mortgage points from your taxes? Each situation is different, but it's worth looking into.
Property Taxes – The fact that you're a Long Island NY home buyer also gives you the responsibility of paying property taxes. In most cases, your taxes are rolled into your monthly mortgage payment, and your mortgage company pays them from your escrow account when they're due.
If you're a first time Long Island NY home buyer, you'll need to know the total real estate taxes for the real property tax year and the number of days in the property tax year that you owned the property.
What a Long Island NY Home Buyer Can NOT Deduct
Although you have to pay them, items Uncle Sam does not let you write off include; homeowner's insurance premiums, homeowner association dues, general closing costs, and home repairs. There are some home improvements that come with a tax credit, and some may qualify for rebates, but overall, home repairs are not deductible.
Being a first time Long Island NY home buyer can have a big impact on your overall tax liability, so do your homework and take the tax deductions you're entitled to.
Get more information about how a first time Long Island NY home buyer may be affected tax-wise in our section on Taxes to your right under Long Island NY Real Estate Categories.
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