Issue Number: Tax Tip 2023-96
Homeowners: review these house-related deductions and programs The summer months are a popular time to buy or sell a house. New homeowners should put reviewing the tax deductions, programs and housing allowances they may be eligible for on their move in to-do list. Deductible house-related expenses
Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The costs the homeowner can deduct are:
Taxpayers must itemize their deductions to deduct home ownership expenses. Non-deductible payments and expenses
Homeowners can't deduct any of the following items: - Insurance including fire and comprehensive coverage and title insurance
- The amount applied to reduce the principal of the mortgage
- Wages paid to domestic help
- Depreciation
- The cost of utilities, such as gas, electricity or water
- Most settlement or closing costs
- Forfeited deposits, down payments or earnest money
- Internet or Wi-Fi system or service
- Homeowners' association fees, condominium association fees or common charges
- Home repairs
Mortgage interest credit
The mortgage interest credit helps people with lower income afford home ownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. An MCC is issued only for a new mortgage for the purchase of a main home. Homeowners Assistance Fund
The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services and also displacements of homeowners experiencing financial hardship after January 21, 2020. Minister's or military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance. More information:
Publication 530, Tax Information for Homeowners
Publication 936, Home Mortgage Interest Deduction Back to top
    
Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message. | 
No comments:
Post a Comment