When does the word “taxes” invoke warm, fuzzy feelings? Never. Nobody wants to deal with taxes; they’re confusing and seem like they always come at the wrong time.
While you’re looking for tax deductions, did you know that some of your Real estate closing costs could be tax-deductible? Of course, there are restrictions, but below are some suggestions and ideas to discuss with your tax professional.
CLOSING COSTS THAT YOU CAN DEDUCT IN THE YEAR THEY’RE PAID:
– Origination Fees or Points on a Purchase
– Points paid on a Home Improvement Cash-out Refi
– Mortgage Insurance
– FHA Mortgage Insurance
– VA Fees
CLOSING COSTS THAT CAN BE DEDUCTED WHEN YOU SELL:
– Owner’s Title Insurance Premium
– Property Taxes
– Title or Abstract Fees
– Legal / Recording Fees
– Survey Fees
– Utility Installation Charges
Unfortunately, you can’t deduct all of your house or property related expenses. Here is the list of items that are NOT tax-deductible.
– Homeowners Insurance Premiums
– Monthly principal payments
– Utility costs
– Money lost on a sale that fell through
– Home Appraisal fees
– Notary Fees
– Document prep Fees
Most of these closing costs can be found on your Closing Disclosure that you would have signed at closing with your Title company. Title companies are limited in what we are allowed to talk about regarding taxes, but Metro Title will definitely help coordinate with you and your tax professional on what taxes can do for you and your property. Tax Season doesn’t have to be a hassle when you have the right people working with you!