Buying a second home usually does offer tax benefits because you are allowed to use mortgage interest and property taxes, sometimes mortgage insurance premiums (MIP) as itemized deductions on your tax return.
If there are any property taxes paid either by escrow in the mortgage or by yourself be sure to include those with the prorated share of property tax on the settlement.
- Do not include amounts paid to escrow each month, this is money put aside to pay the taxes when they are due.
- Condo association fees are not a deductible expense
You can go directly to itemized deductions by following these steps (TurboTax online):
1. Sign into your TurboTax account and select your current return
2. Select My Account in the top Right
3. Select Tools
4. Select Topic Search (see attached image)
4. Search for itemized deductions and select Go
This will take you to the interview process for your property tax deductions.
You can go directly to enter
the information using these steps (TurboTax desktop).
1. Use the Search box in the upper right
2. Search for itemized deductions
3. Jump to itemized deductions
4. Follow the screens to enter your deductions. You can
also search by any category.
