Homeownership usually creates great tax benefits when it comes time to file your returns. If you are a new home Buyer, you may want to consult with a tax professional to make sure that you are taking advantage of all the tax benefits that are available to you.
Most homeowners are able to deduct both the interest that they paid on their mortgage and the property taxes that they paid for the property. Remember that in the early years of paying your mortgage the majority of your payment is interest and therefore the deduction can be a considerable amount on your federal tax return.
It is also important to speak to a tax professional because in your first year of ownership you may have lesser known deductions. Some of these deductions include any points paid at closing (advanced interest) or if you moved because of your job, you may be able to deduct moving expenses (Note: you must keep records and receipts for any costs for moving expenses).
For those homeowners that have recently sold a property, do not forget to provide your CPA the Settlement Statement, which will reflect the amount of property taxes you paid at closing. Your CPA will also need the Settlement Statement to determine whether you owe any income taxes resulting from the sale and whether you have any other deductions allowable from the sale.
Northstar Title and Escrow is not a Certified Accountant so it is important that you consult a professional tax advisor or call the IRS hotline at (800) 829-1040.