{"id":1015,"date":"2018-09-14T18:32:17","date_gmt":"2018-09-14T18:32:17","guid":{"rendered":"https:\/\/mymove-resources.lndo.site\/taxes-for-first-time-homeowners\/"},"modified":"2022-05-05T20:22:41","modified_gmt":"2022-05-05T20:22:41","slug":"taxes-for-first-time-homeowners","status":"publish","type":"post","link":"https:\/\/www.mymove.com\/moving\/paperwork\/taxes-for-first-time-homeowners\/","title":{"rendered":"How do Taxes Change for First-Time Homeowners?"},"content":{"rendered":"<p>You\u2019ve turned the key in the door and taken the first look around your new home as a full-fledged homeowner. Congrats! One foot inside and you\u2019re likely already in <a href=\"https:\/\/www.mymove.com\/home-inspiration\/painting\/\">paint sample<\/a> heaven. The last thing you want to think about is a first-time homebuyer tax credit, right? Well, there\u2019s good news and there\u2019s bad news: Your new home comes with some great tax perks, but you need to start planning now for next year\u2019s filing. Here\u2019s a sampling of the tax benefits of buying a home and tax breaks you can take advantage of.<\/p>\n<h2>Be aware of these new deductions and credits<\/h2>\n<p>Buying your first home is a life event that comes with a whole lot of tax deduction possibilities. These are tried-and-true deductions that add up to serious savings. When you are filing taxes a home owner you can deduct the following:<\/p>\n<ul>\n<li>Mortgage interest. Yes, the interest on your monthly payment is deductible. In 2017 and prior, you could deduct interest on mortgage debt up to $1 million, but as of 2018 filings, that figure has been reduced to $750,000.<\/li>\n<li>Mortgage points. If you brought your mortgage interest rate down by a point or two, you can deduct that cost from your first tax filing after your purchase.<\/li>\n<li>Property taxes. You can deduct your full real estate taxes on your annual taxes.<\/li>\n<li>Mortgage insurance payments. If your down payment was less than 20%, you\u2019re probably paying mortgage insurance every month. Nobody likes paying it, but at least it\u2019s deductible!<\/li>\n<li>Home office space. If you work from home, you can deduct the square footage where you conduct business on your taxes.<\/li>\n<li>Credit for certain home repairs. If you upgrade your home to become more energy efficient, you may be able to deduct some of the costs so hang onto those receipts.<\/li>\n<li>Waived IRA fees. While it\u2019s not exactly a credit, if you dip into your IRA to make a home down payment, the IRS will waive the 10% penalty for removing money early. You can take up to $10,000.<\/li>\n<li>Various itemization benefits. Before you bought a home, you may have taken the standard deduction. With enough reason to itemize, you\u2019re eligible for all sorts of deductions, such as charitable donations.<\/li>\n<\/ul>\n<p>MYMOVE recommends consulting an accounting professional before claiming any tax deductions.<\/p>\n<h2><b>Avoid surprises by planning now<\/b><\/h2>\n<p>Do yourself a favor by planning your taxes ahead. If you\u2019re not aware of which documents you\u2019ll need, it\u2019s better to consult a CPA as soon as you can. Here are a few tips on preparing early:<\/p>\n<ul>\n<li>Make a checklist of mortgage-related payments. Make a list and check it twice \u2013 your mortgage lender will send you necessary tax documents, but know what you\u2019re looking for in the mail and hang onto them.<\/li>\n<li>Keep receipts for home improvements or donations. When in doubt, save all receipts related to everything from charitable donations to home office purchases that could be deducted.<\/li>\n<li>File early in case your accountant needs more information from you.<\/li>\n<\/ul>\n<h2><b>The Bottom Line\u00a0<\/b><\/h2>\n<p>Buying a house is fun, and believe it or not \u2013 filing your taxes can be too with the right preparation and know-how. Plan ahead and take advantage of those tax benefits of buying a home, and you might be able to afford that new big screen TV after all.<\/p>\n<h2><b>Frequently Asked Questions<\/b><\/h2>\n<p><b>How does owning a home affect your taxes?\u00a0<\/b><\/p>\n<p>Owning a home will make your taxes more complicated, as you\u2019ll have more deductions to itemize, but it comes with major tax benefits and will likely mean saving money in the end.<\/p>\n<p><b>What do first-time homeowners need in order to file taxes?<\/b><\/p>\n<p>When filing your taxes as a new homeowner, be sure to have tax documents related to your mortgage payments, mortgage insurance payments, property taxes, receipts of home repairs, and receipts of expenses related to a home office if you work from home.<\/p>\n<p><b>Is there a new homeowner tax credit for 2020?<\/b><\/p>\n<p>The federal first-time homeowner tax credit is no longer available, but many state housing authorities offer first-time home buyer tax credits and assistance programs.<\/p>\n<p><em>Claire Voelker contributed to this report<\/em><\/p>\n<p><b>Sources:<\/b><\/p>\n<p><a href=\"https:\/\/www.gobankingrates.com\/taxes\/deductions\/9-tax-breaks-first-time-home-buyer-must-know\/\">https:\/\/www.gobankingrates.com\/taxes\/deductions\/9-tax-breaks-first-time-home-buyer-must-know\/<\/a><\/p>\n<p><a href=\"https:\/\/turbotax.intuit.com\/tax-tips\/home-ownership\/buying-your-first-home\/L5QxJLcQT\">https:\/\/turbotax.intuit.com\/tax-tips\/home-ownership\/buying-your-first-home\/L5QxJLcQT<\/a><\/p>\n<p><a href=\"https:\/\/blog.turbotax.intuit.com\/tax-deductions-and-credits-2\/home\/life-events-series-how-will-buying-my-first-house-help-my-taxes-11906\/\">https:\/\/blog.turbotax.intuit.com\/tax-deductions-and-credits-2\/home\/life-events-series-how-will-buying-my-first-house-help-my-taxes-11906\/<\/a><\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"How does owning a home affect your taxes? \",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Owning a home will make your taxes more complicated, as you\u2019ll have more deductions to itemize, but it comes with major tax benefits and will likely mean saving money in the end.\"}},{\"@type\":\"Question\",\"name\":\"What do first-time homeowners need in order to file taxes?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"When filing your taxes as a new homeowner, be sure to have tax documents related to your mortgage payments, mortgage insurance payments, property taxes, receipts of home repairs, and receipts of expenses related to a home office if you work from home.\"}},{\"@type\":\"Question\",\"name\":\"Is there a new homeowner tax credit for 2020?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The federal first-time homeowner tax credit is no longer available, but many state housing authorities offer first-time home buyer tax credits and assistance programs. \"}}]}<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You&#8217;ve turned your key in the door and taken the first look around as a full-fledged homeowner. Congrats! One foot in the door, and you&#8217;re&#8230;<\/p>\n","protected":false},"author":{"name":"MYMOVE","image":"https:\/\/www.mymove.com\/wp-content\/uploads\/2018\/12\/e5db2460-52e6-11e8-872d-654d71b263a3-MYMOVE-Logo-Small.jpg","description":"MYMOVE is here to help make moving easier. We\u2019re an authorized affiliate of the USPS\u00ae that connects more than 5 million movers per year to exclusive savings and valuable resources before, during, and after their move."},"featured_media":1016,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_wp_page_template":["default"],"meta_title":[" First time home buyer? Avoid tax surprises and find out what benefits you could be entitled to "],"_meta_title":["field_5be03537a7cf2"],"meta_description":["Great news, first-time home buyers: Your new home comes with some great tax perks. 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