Deductible Home Buying Expenses File

: State and local real estate taxes (SALT) are deductible up to a combined total of $40,000 through 2028.

This cap is reduced to $20,000 for those who are married and filing separately.

Interest on home equity loans is only deductible if the funds were used to buy, build, or substantially improve the home securing the loan. deductible home buying expenses

Check your settlement statement for any pro-rated property taxes you reimbursed to the seller at closing; these are often deductible even if they aren't on your Form 1098.

Understanding Your Deductible Home Buying Expenses Buying a home is one of the largest financial commitments you'll make, but it also opens the door to significant tax advantages. While many of your upfront closing costs are non-deductible in the year you purchase, several key expenses can lower your tax bill if you choose to rather than take the standard deduction. Primary Deductible Expenses : State and local real estate taxes (SALT)

: If you paid "discount points" to lower your interest rate, they are often fully deductible in the year you paid them, provided the loan is for your primary residence and meeting other IRS criteria. Nondeductible Closing Costs

The Internal Revenue Service (IRS) identifies three major categories of homeownership expenses that you can typically deduct: Check your settlement statement for any pro-rated property

This limit applies to loans taken out after December 15, 2017.