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  • Are Mortgage Closing Costs Tax Deductible?

    Question MarkThere are a lot of tax benefits for home owners, some of which include deductions on expenses paid during your mortgage closing. However, there are a lot of categories included in your mortgage closing costs, not all of which are deductible. To determine which closing costs involved with your mortgage are deductible, read on.

    * Points are deductible on your tax return during the year in which they are paid. For example, if you pay points on your closing costs during the year 2010, you can deduct them on your 2010 return. Points are the costs of obtaining the loan, or a loan origination fee. Most points are equal to 1% of the total mortgage.

    * Seller’s paid points are deductable by the buyer as an expense if there is an agreement that the seller will pay the points on the mortgage. However, the seller is not able to claim those points on their tax return; rather the net gain on the sale of the home is reduced by the amount of the points paid.

    * Interest costs are fully deductible through the first 10 years of home ownership. During the closing, you will prepay interest through the month, especially if you close in the middle of the month. Prepaid interest is deductible on your tax return.

    * If you make too much money, there are limitations on the amounts that you can deduct. For matters in regards to this, it is best to contact a tax professional to assist in filing your taxes. A certified public accountant will know the limitations and can apply them to your taxes in the proper manner.

    * Pro-rated property taxes are also deductible. In most cases you will have to pay pro-rated property taxes on the property at the closing. This expense is completely deductible when you file your return.

    Closing costs consist of many fees totaled into one lump sum to be paid upon closing of the house. Some of these expenses are tax deductible depending upon your income and the purpose of the fees. Points, interest and property taxes are a few of the items that are considered tax deductible. To get the maximum deductions allowed, it is best to talk to a tax advisor or CPA to determine how much of your closing costs is deductible.

     

  • Saving Money in the New Year!

    Happy New Year 2014

    Another year is upon us and I hope you have a fantastic financial 2014!  Mine has started off well so far, but I know there is work to be done on my finances and I’ve started some planning to date!

    Working toward your financial goals for 2014 shouldn’t be hard this year.  You know what you want to accomplish and where you want to be so you can begin right now, today!  If you are having a little trouble getting started then you should consider getting your copy of Creating a Savings Plan.

    The book is full of ideas on helping you get started on your savings for this year and helping you to continue those savings throughout the years to come!  I want to see you reach all of your financial goals for 2014 and I’m here to help you in any way that I can!

    Email me questions or simply comment below; either way and I will personally respond.  Your success is important to me and I want this New Year to be the best financial year you have ever had!

    Let me know how you are doing!