Thursday, February 21, 2013 - Article by: Kim Lawson - ACF Mortgage LLC -
While we all prepare for submitting our tax returns I have been getting the questions about what people can or cannot write off. I want to preface this post by stating you should contact your own tax accountant or CPA, to see how this information may be helpful to you and your individual situation.
There's the mortgage debt forgiveness act. This thus far is only good for debts from 2007-2012 tax years. If you had a home that was foreclosed on OR if your lender restructured your loan and forgave you for any debt, this is something you should research further to enable you to write off the maximum amount you can. Here is the link to the IRS website to assist you in reading further on the subject:
For those of you who have purchased a home OR refinanced your home loan. Make sure you have a copy of your HUD-1 when completing your tax returns. These are the fees that you can deduct:
Any advance escrow payments (for property taxes), the full amount, is eligible for deduction in the year you closed your loan.
Disc points used to pay for interest rate reductions or loan origination costs are deductible. Both would be deducted in the year the loan closed on purchase loans. Only orig points can be deducted in the same year for a refi. Again for a refi you must spread points paid to reduce your interest rate over the life of the loan. For example if you paid two points: one is for orig and one for interest rate buy-down, you take one point as a deduction the year the loan closed and deduct the other one over the life of the loan.
If you refinance with a government-backed loan that carries upfront mortgage insurance or a funding fee, (FHA, USDA or VA) this fee is tax-deductible. You can deduct the full amount in year you closed.
There wasn't a "Category" this post best fit however, I thought the information would benefit First Time Buyers more than anything. Of course, this information is for after you close your home loan and for tax purposes only. However, please contact your tax accountant or CPA to see how this information could possibly benefit you.
Kimberly A Lawson
NMLS: 5601 OH.LO.004495.000
First Priority Financial
MBMB.850147.001 NMLS: 3257
748 N Court St Ste 201
Medina, OH 44256
Fair Housing & Equal Credit Opportunity
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