Homebuyer Tips

Possible Tax Deductions for Homeowners

One of the greatest benefits of purchasing a home used to be the deductions it gave you on your annual income taxes. Those deductions are still available, but changes in tax laws make it more challenging for many homeowners to take advantage of them. Do you still have enough deductions to itemize your income tax return? To help you maximize them, we’ve compiled this list of potential tax deductions for homeowners:

Home Acquisition Mortgage Loan Fees

These are fees paid to obtain the mortgage on your primary home (points, origination fees and lender fees). The amount you paid (if any) for origination fees and discount points is listed on your 1098 Mortgage Interest Statement. If you haven’t received your statement, contact your lender. Consult with your tax advisor regarding the deductibility of lender fees.

Prorated Real Estate Taxes

If you bought or sold property last year, remember to deduct any prorated real estate taxes you paid at closing. Even if the other party remitted the payment to the tax collector, you can deduct your share on your 2019 filing if you were charged prorated tax.

Prorated Mortgage Interest in the Year of Property Purchase or Sale

If you bought a residence and took over an existing mortgage, you can deduct your prorated interest share for the month of the sale. Your final closing/settlement statement (more commonly referred to as a Closing Disclosure) shows your prorated share of the mortgage interest.

Real Estate Taxes

Listed on your tax statement from your city/county/school district

Mortgage Interest Paid for the Year

Listed on your 1098 Mortgage Interest Statement PMI/MIP According to the IRS website, “Mortgage Insurance premiums qualify for residence interest.” Be sure to talk to a CPA or tax preparer to verify this information before you file your taxes. First Bank is not a CPA or tax preparer/advisor.

Again, you only qualify for these deductions if you itemize your taxes using a schedule A and not the standard deduction. Last year, the number of homeowners who claimed these deductions decreased by more than 50% because the standard deduction increased. Consult your tax preparer/advisor for more information.

Important Note: It is important that you contact your tax advisor or visit the IRS website at www.irs.gov and look for publication 530 if you have any questions on filing your income taxes with home tax deductions. First Bank is not a tax advisor company and this letter is for information purposes only.

Questions? Call us at 469-277-3535. To meet our team of home loan experts, click here. 

Homeowner Guide

Possible Income Tax Deductions for Homeowners

Tax day is quickly approaching. If you might owe money, or if you’re just looking for every deduction possible, here are a few that may benefit homeowners. This information is provided for general purposes only […]

Learn More
Homebuyer Tips

Affordable Mortgage Strategies to Overcome Rising Rates

Over the past year, many consumers have put their dreams of home ownership on hold due to fluctuating mortgage rates. But here’s the thing: rates are just a small piece of the puzzle when it […]

Learn More

Jumbo Loans

Afford High-Dollar Homes With Jumbo Loans  Everyone drives around neighborhoods filled with large homes at one time or another, pointing at them and dreaming of living in one someday. These homes might seem forever out […]

Learn More
Trending Now

Resources & News

Whether you’re purchasing a new home or refinancing an existing one, all it takes is a few minutes to complete the first step in our application process.

Get Started

Stay Connected

Skip to content