There may be many common tax benefits for purchasing a home in Nashua NH through use of tax deductions. Deductions lower your taxable income and therefore lead to lower taxes. It is useful to learn the tax benefits before purchasing or when comparing renting vs. buying. This article offers information on Nashua NH common tax benefits for purchasing a home.
Tax Deduction Requirements
Not everyone can take advantage of tax deductions. When completing your taxes, you can opt for the standard deduction or itemized deductions, whichever is more favorable. If you own a low priced Nashua NH home, the deductible expenses may not add up to higher than the standard deduction. Other financial variables may factor in as well. Only a tax advisor can give you a true understanding of the tax benefits of owning a Nashua NH residence taking into consideration your personal finances.
Deductible Property-Related Expenses
Loan Interest
Only the interest part of your loan payments are tax deductible. In the first few years of having a Nashua NH property, you pay more in interest than principal. As a result, the total deductible interest is higher when you first own a property than in later years. Your loan provider will mail you a statement each year totaling the mortgage interest paid on your Nashua NH property.
Real Estate Taxes
Nashua NH real estate property taxes may also be tax deductible. Real estate taxes are an annual amount but are usually billed in quarterly amounts. These taxes are sometimes included in your mortgage payments, but hold on to copies of the property tax bills mailed directly to you. The figure in mortgage statements may not reflect the full calendar year.
MI
If you first purchased your Nashua NH residence within a special period of time and if you are under a certain income range, you can possibly deduct MI fees. MI is invoiced on a monthly basis for loans more than 80% of the home value and until the loan amount decreases to the 80% level.
Points and Other Charges
Be sure to keep a copy of your closing settlement statement. Some charges such as points, adjusted real estate taxes, and pre-paid interest can be deductible. Furnish the paperwork to your tax consultant.
Information On Nashua NH Common Tax Benefits For Purchasing A Home
The above is information on Nashua NH common tax benefits for purchasing a home and applies to primary residences. If you own investment property, the potential deductions vary. This is meant only as a basic overview. Always ask a tax professional for solid information tailored to your personal situation or to your type of residence.