Tax Deductions For Owning Homes In Boston MA

There can be several tax deductions for owning homes. Deductions reduce your taxable income and thus lead to fewer taxes owed. It is helpful to understand the tax benefits when buying a property or when analyzing renting vs. buying. This article includes details on tax deductions for owning homes in Boston MA.

Tax Deduction Requirements

Not everyone can claim tax deductions for owning homes in Boston MA. When completing taxes, you may apply the standard deduction or itemize your deductions, whichever calculates to lower taxes. If you own an inexpensive home, the deductible costs may not total more than the standard deduction. Other financial variables might impact these figures too. A tax consultant will offer a better understanding of the tax benefits of buying a residence by taking into consideration your personal finances.

Usable Home Costs

Loan Interest

Just the interest part of your loan payments are tax deductible. In the first few years of owning a home, you spend more on interest than anything else. Thus, the amount of deductible interest is higher in those first few years. Your loan provider will send you a statement every year totaling the sum of interest paid.

Municipal Taxes

Municipal taxes can also be tax deductible. Real estate taxes are a yearly calculation but are often billed in smaller increments. These taxes can be part of your mortgage payments, but file copies of the tax statements forwarded directly to you. The figure in the statement by your mortgage company may not detail the total amount, especially if you purchased the house mid-year.

MI

If you bought your real estate within a special time frame and if you are part of a certain income bracket, you might be eligible to deduct mortgage insurance payments. MI is typically paid at closing and monthly for mortgages more than 80 percent of the home price and does not disappear until the loan balance drops below the 78% level.

Points and Other Fees

Be sure to retain the original of your closing statement. Certain fees such as points, property taxes, and pre-paid interest can be used. Furnish the documentation to your accountant.

Tax Deductions For Owning Homes In Boston MA

The above tax deductions for owning homes in Boston MA refers to primary homes. If you bought investment real estate, the list of deductions may not be the same. The above is shared solely as a simple overview. Be sure to ask a tax consultant for solid guidance tailored to your individual profile.

About Scott Beard

Finding the right Realtor can be the difference between a happy, stress-free home buying or selling experience, and an unhappy, stressful experience. That’s why choosing the right Agent to begin with is key. I have helped hundreds upon hundreds of clients during my career and sold over $55 million in properties and look forward to putting my experience to work for you.
Contact me at any time. I look forward to hearing from you.

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