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Tax benefits of buying a new home in Dec 2018 or later and documents needed for that
I understand I get to deduct mortgage interest, discount points paid to lower interest, private mortgage insurance and property taxes on home. Our average gross income is 160K and the homes we are looking are in range of 400-450K in south of Denver, CO. I saw the useful article at https://turbotax.intuit.com/tax-tips/home-ownership/buying-your-first-home/L5QxJLcQT
I understand a 1098 from our mortgage lender will help with some information.
1. What else can I claim to reduce my taxes?
2. Can cost of adding solar panels be deducted?
3. What documents would I need to claim the tax deduction?
4. Will the lender issue me a receipt for paying for discount points?
5. Do I need to keep track how much I am paying each month for loan principal and interest or will the lender send me something I can use during tax filing?
6. Should I keep track of mortgage insurance I am paying since our down-payment will be 10% of home price or will I get a document for that?
7. Anything else I should be aware for reducing my taxes?
Thanks
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Deductions & credits
Buying a home in December will do little (or nothing) for your 2018 tax return. If you do not already have a deal ready to close, your chances of doing that by the end of December are slim. For 2019:
Home Ownership
There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.
Buying a home is not a guarantee of a big refund. Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home ownership deductions.
Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees. There are no deductions for appraisal, inspections, title searches, settlement fees. etc.
Your down payment is not deductible.
Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.
Home improvements, repairs, maintenance, etc. for your own home are not deductible.
Homeowners Association (HOA) fees for your own home are not deductible.
In late January or early February, homeowners who have mortgages receive a 1098 from their lender, showing how much mortgage interest, loan origination fees, and property tax was paid for the tax year. That is what you use on your tax return.
There is now a $10,000 limit on how much you can deduct for property tax, state and local taxes, and sales tax. (SALT) Many people will find that with these limits, they are unable to itemize on their tax returns, because even with these homeownership costs and mortgage interest, their itemized deductions may not exceed the standard deduction.
2018 Standard Deductions:
Single $12,000 (+ $1600 65 or older)
Married Filing Separately $12,000 (+ $1300 65 or older)
Married Filing Jointly $24,000 (+ $1300 each spouse 65 or older)
Head of Household $18,000 (+ $1600 65 or older)
Please read about the laws regarding mortgage interest, home equity loan, and SALT:
https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return
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My boss told me to go ahead with house purchase since he is not 100% sure if I will be asked to move to another town or not. He feels if I am not asked to move, I can get a house where I am getting equity with each mortgage payment instead of renting.
A. If I buy a house then asked to move out of town for work reasons without being able to live in the house I bought, make mortgage payments for 6 months, then decide to sell the house, what are the tax matters I need to be aware of?
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In Turbo Tax 2021, I am unable to enter my property taxes. I can enter the taxes for my secondary, but not my primary home.