Buying a home is a big commitment and expense, and it can greatly impact your 2019 taxes. For most people, this purchase will either benefit their taxes for this year, or have a neutral net effect. No matter what you think you may owe – or be owed – on your 2019 taxes, it’s worth investigating some of the possible deductions and credits you may be eligible for to see if you can lower your tax bill. Even a small deduction can make a big difference! Here are 6 ways buying a house in Princeton can impact your 2019 taxes.
DEDUCT MORTGAGE INTEREST
If you own a home that is worth less than $750,000, you can deduct the interest that you pay on your mortgage on your 2019 taxes.
For some homeowners, this can add up to thousands of dollars per year, meaning you get a big savings. And if you also have a home-equity line of credit, you can deduct that interest, too, as long as the total of both loans is under $750,000.
DEDUCT SOME PROPERTY TAXES
For those homeowners who pay under $10,000 property taxes, you can completely deduct the taxes you pay on your 2019 taxes. This deduction does add together both state and local property taxes, so those two line items combined must be under $10,000 to qualify for a complete deduction.
If you live in an area where these taxes combined exceed $10,000, you still can deduct the first $10,000, which is a pretty solid chunk of change for many homeowners.
If you paid points on your mortgage and actually exchanged money with your lender to do so, you can deduct those points on your taxes.
So, if you paid three points on a $300,000 mortgage and each point is 1.5 percent of your mortgage total, those points cost you $13,500. If you make $200 payments each month toward those points, then you can deduct $2,400 off your 2019 taxes.
DEDUCT PMI (IN SOME CASES)
When you have less than 20 percent equity in your home – such is the case for some first-time loans or other low-down-payment loans – you must pay Personal Mortgage Interest until you have built up that equity.
If you took out your mortgage after 2007 and are paying PMI, you can deduct that on your 2019 taxes if your adjusted gross income is below $100,000 for a married couple or $50,000 for an individual.
ENERGY EFFICIENCY TAX CREDITS
If you purchased a home that wasn’t doing so well in terms of energy efficiency, and you made upgrades, you may be able to get tax breaks for those changes.
For those who have made solar upgrades to their homes between January 1, 2017, and December 31, 2019, you can deduct up to 30 percent of the cost of those upgrades – both electric and water – on your 2019 taxes.
DEDUCT AGING IN PLACE EXPENDITURES
For those who purchased homes that needed upgrades to make them more accessible as they age, there are deductions available for making those improvements.
The cost of items such as wheelchair ramps or shower grip bars, used to make a home safer for older homeowners, can be deducted on taxes.
Additionally, some homeowners may be able to deduct other changes to make their homes more accessible, such as lowering the height of electrical switches and cabinets.
Professional, Experienced Help Buying a Home in 2019
If you’re thinking of buying a home before the end of the year, you may not completely consider how that purchase is going to impact your 2019 taxes. However, you may be eligible for several deductions, lowering your overall tax bill. If you’d like to buy a home in Princeton, contact us at (609) 436-5221!