April 15 is fast approaching and while the Marti Hampton Team are not accountants or tax attorneys, we have learned a few things that you should consider if you own Raleigh real estate and particularity if you purchased a home last year.
If you are a Raleigh area homeowner, these tips can potentially save you thousands of dollars on your tax bill.
The first item that is usually deductible for your primary residence is the mortgage interest that you paid during the tax year. This includes interest paid on your first and second mortgages, home improvement loans and home equity lines of credit.
If you purchased a home this past year the closing costs you paid are usually not deductible, but if you paid points they may be. Points are the amount of money you paid to reduce the interest rate on your loan. If you purchased last year, the points you paid to reduce the interest rate on the original loan or loans are usually deductible in the year they were paid.
Should you have refinanced your home last year, the points are usually deducted each year over the life of the loan.
Another item that is usually deductible is the real property taxes on the home. If you had to pay some form of special assessment to the city, county or Home Owners Association for improvements for things such as water, sewer, and street repairs or common area maintenance – I am sorry but these usually are not deductible.
Did you pay your mortgage late (like so many others) and have to pay a late fee? Again, these are usually deductible as are fees charged for paying off the home loan early.
What about private mortgage insurance (PMI)? If the loan was originated after January 1, 2007 this can be deductible, but there are limitations.
All of these are governed by strict rules and not everyone may be eligible. Be sure to check with a qualified tax preparation professional before taking any deductions on Raleigh NC real estate.