There are several items in your closing costs that are tax deductible, but let’s start with the ones that are not. You cannot get a tax deduction on real estate commissions, appraisals, home inspections, attorney fees, title fees, transfer taxes and mortgage refi fees. Now, let’s take a look at some that may be tax deductible. Many of these deductions have limitations.
First, you may be able to get deductions on your mortgage interest. $750,000 is a key number. You can write off the mortgage interest on a mortgage up to $750,000. Also, you can write off home equity loan or refi interest. However, this is only if you use that money was used to greatly improve the home and if it, along with your first mortgage do not exceed $750,000. These are some of the more complicated rules.
Also, you can deduct the state and local taxes paid during the year, up to $10,000. You can write off losses from a disaster. However, in order to do so, your area must have been declared a Federal Disaster Area. Moving costs can be tax deductible if you an active military member moving to another base. If you have a mortgage and students loans, you deduct up to $2,500 in interest on your student loans.
These are just a few of the tax deductions that you may be able to claim. Please click the link below to see more.
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