Home Purchase

Forum|Forum|3 years ago
July 27, 2022
1 reply
10 views

I purchased a home in December 2021, but I didn't start making mortgage payments until January 2022.

How will this affect my tax bill?

I owed money last year and have been paying in on estimated tax vouchers.

Will this still be necessary next year now that I am a homeowner?

conniem123

Level 7

Hi Meljane20! Congratulations on purchase of your home! Great you are making estimated payments since you did owe tax on your 2021 tax return.

While you don't report the purchase of your home on your tax return, there are some common expenses that will increase your deductions if you take the itemized deductions instead of the standard deduction. The most common are mortgage interest and property taxes paid, there are others too.

https://turbotax.intuit.com/tax-tips/home-ownership/buying-your-first-home/L5QxJLcQT

To know if the purchase of your home will affect your taxes in 2022 you would need to determine if you will be taking the standard deduction or itemized deduction. The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.

To know if you need to continue in 2023 to make estimated payments, you will want to look at that more closely after you prepare your 2022 tax return, and the itemized versus standard deductions.

I hope you find this helpful!

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