New Year, New Home: Tax Tips for First-Time Homeowners

As we step into a new year and approach tax season, it’s the perfect time to ensure you’re prepared to maximize the financial benefits of homeownership. If you purchased a home in 2024, there are several tax-related considerations that could lead to significant savings. Here’s what you need to know:

Gather Essential Documents

Your home’s closing statement is an important document you’ll need for your 2024 income tax return. This statement contains crucial details about expenses and payments made during your home purchase. Since these documents can occasionally be misplaced, take a moment to locate your copy and keep it handy for tax preparation.

Key Tax Deductions for Homeowners

Owning a home brings with it some valuable tax deductions. Here are a few to keep in mind:

• Mortgage Interest: The interest you’ve paid on your mortgage throughout the year is tax-deductible. Be sure to review your lender’s year-end statement to include the full amount.

• Property Taxes: The property taxes you’ve paid are also deductible. These may appear on your closing statement or lender’s tax documents.

• Points Paid on Your Mortgage: If you or the seller paid points to secure your mortgage, these are generally treated as interest and may qualify as deductions.

• Interest Paid at Closing: Review your closing statement to check for any interest paid to the end of the purchase month that might not appear on your lender’s year-end statement.

• Other Potential Deductions: In some cases, prepayment penalties or unamortized points might also be deductible. Consult your tax advisor to see if these apply to your situation.

Consult with a Tax Professional

While these deductions can provide substantial savings, navigating tax laws can be complex. To ensure you’re taking full advantage of every deduction and benefit available, it’s wise to consult with a trusted tax professional. If you’re in need of a recommendation, don’t hesitate to reach out—we’d be happy to connect you with an expert.

A Final Reminder

Homeownership offers not only the joy of having a place to call your own but also opportunities to save at tax time. By staying informed and organized, you can start the new year on the right financial foot.

If you have any questions or need further assistance, our team is here to help. Wishing you a successful tax season and a prosperous year ahead!

(P.S. While we love to share tips, we’re real estate experts—not tax pros! Think of us as your cheerleaders, not your accountants. Always consult a tax professional to double-check the fine print.)