Tuesday, 20 February 2007
We enjoyed a winter wonderland in Jefferson County last week. Well, maybe "enjoyed" isn't the correct word, but when the sun finally came out, the ice-covered trees glistened beautifully! A warm up is forecast for this week and we aren't hearing any complaints about that!
As spring approaches, everyone's thoughts turn to income tax preparations. To assist you with that chore, this week's letter has some valuable suggestions. Of course, we are Realtors, not accountants, so please consult your tax preparer for professional advice.
Comprehensive IRS Interest Deduction Information/Instructions for Homeowners: http://www.irs.gov/pub/irs-pdf/p936.pdf
Points Paid on a Refinanced Loan
If you refinanced, you may be able to write off the points you paid to get a lower rate on the new loan. Points paid on a refinance are deducted proportionately over the life of your loan. For example, if your new loan has a 15-year term, you'll deduct 1/15th of your points each year.
If you've refinanced before, and you have points from the previous refinance that haven't yet been deducted, you can write off the rest of those points in the year you refinance.
Points Paid on a Home Purchase Loan
The points you pay to get a lower interest rate on a home purchase loan are tax-deductible for that year. Whether you paid for them or whether the seller paid for points for you, you may be able to deduct them.
The interest you're paying on the loan(s) for your home may be tax-deductible, no matter what the interest rate . Mortgage interest is one of the best tax deductions, and some homeowners don't even know about it. The interest you deduct may be on a loan secured by your first or second home. Your deduction may be limited if all mortgages on your home total either more than the fair market value of your home, or more than $1 million ($500,000 if you're married and filing separately from your spouse); or if your home equity loans total more than $100,000 ($50,000 if you're married and filing separately). Learn more about this tax deduction: www.IRS.gov.
May your receipts be easy to find and your refund large!