Including your new home on your tax return may not seem exciting, but there are several home expenses you pay regularly that are fully tax deductible. These deductions reduce your taxable income -- and the income taxes you pay -- and that is exciting. You’ll use IRS Schedule A to report your deductible new home expenses. Some expenses you incur for securing the title to your home or making improvements will be added to the total cost of your home and recovered when you sell the property..
Report property taxes you pay on line 6 of Schedule A. The taxes you paid may appear on your mortgage interest document, Form 1098. You may claim taxes you paid even when they are paid through your escrow account by your mortgage lender. If the real estate taxes you paid do not appear on your mortgage interest statement, you can obtain the information from your county tax assessor.
Report mortgage interest and points you pay on line 10 of Schedule A. If the mortgage interest you paid does not appear on the Form 1098 document you receive from your lender, report interest you paid on line 11. When you report interest you paid on line 11, you must also include the name and address of the lender, as well as the employer identification number or Social Security number of the lender. Points you pay may include origination fees paid to close your new home loan and are usually also shown on Form 1098. If points you paid do not appear on Form 1098, report the points on line 12.
Report mortgage insurance premiums you pay on line 13. If you put less than 20 percent down on your new home, you must pay monthly mortgage insurance as a condition of your loan. Mortgage insurance premiums you pay appear on Form 1098.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.