The first benefit is that all of the interest that you pay on the mortgage will be considered a deductible. This is as long as the mortgage that you have on the home is not over $750,000. The deduction is simple to do no matter if you are doing your taxes yourself or having a professional to do them. Plus, you are going to be able to include the interest that you paid as part of the closing of your home. All of this will be found on the settlement sheet.
The second benefit is some of the money that you have paid on your property taxes are also deductible on your taxes. At one time, you had the ability to deduct all of your taxes but now based on the new tax laws, you will be able to deduct about $10,000. It is a combination of the state and local income taxes with the deduction of the state and local property taxes. But you are no longer going to be able to deduct your foreign property taxes like you used to do a few years ago.
The third benefit is that you can use the tax deduction for your points over the life of your loan. This means that if you paid any points to the lender when you got a mortgage, then you will have the ability to take advantage of a tax deduction. The only thing is that you actually have to give money to the lender in order to get these points. These points are going to be expressed as a percentage of your mortgage loan. Basically, the benefit will be used if you have a home equity line of credit.
The fourth benefit is that private mortgage insurance can be deducted most of the time. This insurance is a fee that you are going to pay when you put less than twenty percent down on your home. This is done to protect the lenders from any type of loss if you happen to default on your loan. But if you don't want to pay the private mortgage insurance, then it is recommended that you pay 20 percent down on your home. If this is something that you can't do, then the deductible is definitely going to be a benefit for you.
The fifth benefit is that you will get some tax benefits if you have made some energy-efficient upgrades to your home. There are a few that are no longer available to you but you will still have the ability to take advantage of some. For example, if you have solar energy appliances like the electric and water heating equipment until 2021. It is important to remember that the longer that you wait to take advantage of these tax benefits, the less money that you are going to be able to get back on your income taxes.