Buying a 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.
Itemized deductions are used if they are greater than the standard deduction allowed for your filing status (image attached for review). TurboTax maximizes refunds, and it compares both, ensuring the best outcome.
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Note: In the year of purchase, depending on the time of year, there may not be enough deductions. Once you have a full year of expenses this can make a real difference in your tax liability.
If there are any property taxes paid either by escrow in the mortgage or by yourself be sure to include those. Use all allowable deductions such as contributions to various charities, medical expenses if they exceed 10% (7.5% if age 65 or older), miscellaneous job related expenses required by your employer if they exceed 2% of your income to maximize your deductions.
You can go directly to itemized deductions by following these steps:
1. Sign into your TurboTax account and select your current return (online or desktop)
2. Select Search box in the top Right
3. Jump to itemized deductions
This will take you to the interview process for your tax deductions. (see attached images for assistance)
- The following Items on the settlement statement will be added as
purchase expenses to the purchase price reducing the taxable gain on the
sale in the future.
- Title charges, recording fees, transfer tax,
other settlement fees
