Your home provides many tax benefits—from the time you buy the property right on through to when you decide to sell. However, the Tax Cuts and Jobs Act , the massive tax reform law passed by Congress in 2017, placed limits on some of these benefits for the years 2018 through 2025. Let us help you find out which https://turbo-tax.org/ credits and/or deductions you can claim! The income phaseouts and other eligibility requirements for this version of the credit are the same as those described above. The First-Time Homebuyer Credit will allow taxpayers a maximum credit of up to $8,000 or $4,000 for married filing separately individuals.

• As a homeowner, you’ll face property taxes at a state and local level.
• Mortgage interest is the interest fee that comes with a home loan.
• The amount of interest that can be deducted depends on several factors, including the amount of the mortgage and the taxpayer’s income bracket.
• First, you must occupy the home as your primary residence within 60 days of purchase.

For homeowners, learning as much as you can about your potential tax benefits can help you maximize your tax refund when you file your income tax return. Reverse Mortgage – Contents not provided by, or approved by FHA, HUD or any other government agency.

Home Mortgage Interest Deduction

One of the best places to search for such incentives is through local and state government websites. If you’re still looking for the first-time homebuyer credit, it unfortunately no longer exists. However, people who purchased homes before 2010 can still benefit from the tax credit initiative. Specifically, you may still be eligible if your closing took place on or before Sept. 30, 2010. People who purchased homes after 2010, however, won’t benefit from the tax credit. If you were using the home as your primary residence for 2 of the last 5 years, you could keep some profits without any tax obligation. As a married couple filing jointly, you can keep up to $500,000 in capital gains.

• And believe it or not, you get to deduct the points even if you convinced the seller to pay them for you as part of the deal.
• The effort to stand up a state-level down payment assistance program is longstanding and has historically won bipartisan backing.
• Some provinces may offer home buying programs specifically designed to make homes more affordable for first-time buyers, too.
• Savers with a traditional IRA can withdraw up to $10,000 from the account to buy, build or rebuild a first home without paying the 10% early-withdrawal penalty — even if you’re younger than age 59½.
• Most states offer first-time homebuyer programs that include tax credits, and may even provide zero-interest loans and grant money to put toward a down payment.
• This bill is one of President Biden’s many campaign promises that has not yet passed, similar to student loan debt cancellation.
• When you use an ATM, in addition to the fee charged by the bank, you may be charged an additional fee by the ATM operator.

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site . The First-Time Home Buyers’ Tax Credit, also known as the HBTC, is a federal government initiative to make homeownership more affordable for some Canadians. Or, to put it another way, if you have a 2,000-square-foot home and your office takes up 200 square feet, you can deduct 10% of your eligible expenses. If those home expenses total $10,000, you get a $1,000 deduction. Rocky was a Senior Tax Editor for Kiplinger from October 2018 to January 2023. He has more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals.

Must earn a modest income based on location and household size

If you only use the office space when it is convenient, or just for working from home for your employer, that will not qualify. For married couples filing jointly, the standard deduction is $25,100. Homeownership costs extend beyond down payments and monthly mortgage 5 Tax Breaks For First Time Homebuyers payments. Be sure to consider how much home you can actually afford before you begin to hunt—not just for the home, but for a mortgage lender. Many states—for example, Illinois, Ohio, and Washington—offer down payment assistance for first-time homebuyers who qualify.