Home Sweet Homeowner Tax Breaks housing benefit free phone number

But be careful. If you don’t vacation at least 14 days at your second property, or more than 10% of the number of days that you do rent it out (whichever is longer), the IRS could consider the place a residential rental property and ax your interest deduction. Points

The IRS lets you deduct points in the year you paid them if, among other things, the loan is to purchase or build your main home, payment of points is an established business practice in your area and the points were within the usual range. Make sure your loan meets all the qualification requirements so that you can deduct points all at once.

A homeowner who pays points on a refinanced loan is also eligible for this tax break, but in most cases the points must be deducted over the life of the loan.

So if you paid $2,000 in points to refinance your mortgage for 30 years, you can deduct $5.56 per monthly payment, or a total of $66.72 if you made 12 payments in one year on the new loan.Housing benefit free phone number

The same rule applies to home equity loans or lines of credit. When the loan money is used for work on the house securing the loan, the points are deductible in the year the loan is taken out. But if you use the extra cash for something else, such as buying a car, the point deductions must be parceled out over the equity loan’s term.

A big part of most monthly loan payments is taxes, which go into an escrow account for payment once a year. This amount should be included on the annual statement you get from your lender, along with your loan interest information. These taxes will be an annual deduction as long as you own your home.

A partial exclusion can be claimed if the sale was prompted by residential damage from a natural or man-made disaster or the property was “involuntarily converted,” for example, taken by a local government under eminent domain law.Housing benefit free phone number

Second home sales also can provide some tax benefits, but not as much as they did in the past, thanks to a law that took effect in 2008. Previously, you could move into your vacation property, live in the home as your primary residence for two years and then sell and pocket up to $250,000 or $500,000 profit tax-free. Now, however, you’ll owe tax on part of the sale money based on how long the house was used as a second residence. Foreclosure tax troubles

Others disposed of their homes via a short sale to prevent more drastic lender action. In a short sale, the mortgage lender allows you to sell the property for less than the outstanding loan balance and cancels the remaining loan balance.

Because so many homeowners were facing cancellation of debt, or COD, tax bills, the mortgage debt relief act of 2007 was enacted to provide some relief.Housing benefit free phone number under this law, homeowners who were foreclosed, completed a short sale or had their home debt reduced by mortgage restructuring do not have to count the canceled debt as taxable income.

However, this law expired on dec. 31, 2014. It is part of a larger group of tax breaks known as extenders that are expected to be reconsidered by congress sometime in 2015, but there is no guarantee that the mortgage debt relief act will be renewed again. What’s not tax-deductible

One such expense is insurance. If you pay private mortgage insurance, or PMI, because you weren’t able to come up with a large enough down payment, that’s a cost you probably won’t be able to deduct — unless you meet the requirements of a special PMI law. Under this law, some homeowners can deduct on schedule A their PMI payments on loans originated or refinanced between jan. 1, 2007, and dec. 31, 2014, and which meet certain loan amount limits.Housing benefit free phone number

The other big home-related insurance cost, property hazard insurance premiums, still remains nondeductible for all, even though the coverage generally is required as part of the home loan and is included as a portion of your monthly payment.

Other nondeductible residential expenses include homeowners association dues, any additional principal payments you make, depreciation of your home, and general closing costs and local assessments to increase the value of your neighborhood, such as construction of new sidewalks or utility connections.

But hold on to the receipts. Some longtime homeowners may find their property has appreciated beyond the $250,000 ($500,000 for married couples) amount the IRS will let you keep tax-free when you sell. If that happens, the records of property improvements could help you establish a higher basis for your house and reduce your taxable profit.Housing benefit free phone number

But be careful. If you don’t vacation at least 14 days at your second property, or more than 10% of the number of days that you do rent it out (whichever is longer), the IRS could consider the place a residential rental property and ax your interest deduction. Points

The IRS lets you deduct points in the year you paid them if, among other things, the loan is to purchase or build your main home, payment of points is an established business practice in your area and the points were within the usual range. Make sure your loan meets all the qualification requirements so that you can deduct points all at once.

A homeowner who pays points on a refinanced loan is also eligible for this tax break, but in most cases the points must be deducted over the life of the loan. So if you paid $2,000 in points to refinance your mortgage for 30 years, you can deduct $5.56 per monthly payment, or a total of $66.72 if you made 12 payments in one year on the new loan.Housing benefit free phone number

The same rule applies to home equity loans or lines of credit. When the loan money is used for work on the house securing the loan, the points are deductible in the year the loan is taken out. But if you use the extra cash for something else, such as buying a car, the point deductions must be parceled out over the equity loan’s term.

A big part of most monthly loan payments is taxes, which go into an escrow account for payment once a year. This amount should be included on the annual statement you get from your lender, along with your loan interest information. These taxes will be an annual deduction as long as you own your home.

A partial exclusion can be claimed if the sale was prompted by residential damage from a natural or man-made disaster or the property was “involuntarily converted,” for example, taken by a local government under eminent domain law.Housing benefit free phone number

Second home sales also can provide some tax benefits, but not as much as they did in the past, thanks to a law that took effect in 2008. Previously, you could move into your vacation property, live in the home as your primary residence for two years and then sell and pocket up to $250,000 or $500,000 profit tax-free. Now, however, you’ll owe tax on part of the sale money based on how long the house was used as a second residence. Foreclosure tax troubles

Others disposed of their homes via a short sale to prevent more drastic lender action. In a short sale, the mortgage lender allows you to sell the property for less than the outstanding loan balance and cancels the remaining loan balance.

Because so many homeowners were facing cancellation of debt, or COD, tax bills, the mortgage debt relief act of 2007 was enacted to provide some relief.Housing benefit free phone number under this law, homeowners who were foreclosed, completed a short sale or had their home debt reduced by mortgage restructuring do not have to count the canceled debt as taxable income.

However, this law expired on dec. 31, 2014. It is part of a larger group of tax breaks known as extenders that are expected to be reconsidered by congress sometime in 2015, but there is no guarantee that the mortgage debt relief act will be renewed again. What’s not tax-deductible

One such expense is insurance. If you pay private mortgage insurance, or PMI, because you weren’t able to come up with a large enough down payment, that’s a cost you probably won’t be able to deduct — unless you meet the requirements of a special PMI law. Under this law, some homeowners can deduct on schedule A their PMI payments on loans originated or refinanced between jan. 1, 2007, and dec. 31, 2014, and which meet certain loan amount limits.Housing benefit free phone number

The other big home-related insurance cost, property hazard insurance premiums, still remains nondeductible for all, even though the coverage generally is required as part of the home loan and is included as a portion of your monthly payment.

Other nondeductible residential expenses include homeowners association dues, any additional principal payments you make, depreciation of your home, and general closing costs and local assessments to increase the value of your neighborhood, such as construction of new sidewalks or utility connections.

But hold on to the receipts. Some longtime homeowners may find their property has appreciated beyond the $250,000 ($500,000 for married couples) amount the IRS will let you keep tax-free when you sell. If that happens, the records of property improvements could help you establish a higher basis for your house and reduce your taxable profit.Housing benefit free phone number