Property Tax Deduction Tips You Probably Didn’t Know About

Owning your own home provides huge tax advantages. Here are two common tax advantages most home owners know about two bonus tax tips most people don’t know about.

Here’s how to take advantage of your home tax deduction.

  1. Deduct the interest that you paid on your mortgage. Your lender should provide a tax statement that summarizes how much interest you paid in the previous year. You can deduct 100% of the interest you paid.
  2. Deduct any real estate property tax you paid in the previous year. You should have received your property tax statement when your taxes were due in the previous year. This date varies depending upon when you initially purchased your property. You can deduct all property tax you paid for the year.

Bonus tips for maximizing property tax deductions;

  1. If you pay one extra mortgage payment per year you will pay your mortgage off seven years early if you have a 30 year mortgage loan. The additional interest paid on the single addition payment is also deductible so you receive a double benefit.
  2. You can pay your property tax early. The property tax deduction amount derives from the property tax payments you made during any given year. So for example, if you make a double tax payment in one year you can include both payments in your property tax deduction.

If you are renting, consider buying a home this year. In the long run you receive big tax savings in addition to building personal wealth and long term financial stability.