First-time homebuyer tax deductions?

#1

Are there first time homebuyer tax deductions such as for closing costs and the like? I’m using HR Block and not seeing the section that’s relevant. I did find the section on interest deduction as well as property taxes.

1 Like

#2

No such thing, but you can deduct your points IIRC.

1 Like

#3
  1. Any taxes, city transfer tax, property tax can be limited to 10k ceiling.
  2. Points should be amortized for 30 years (or 15 years) whatever the original mortgage is. ARM points may also be amortized for 30 years for tax purpose.

Other than interest and property tax, no other expenses/costs can be included in tax return for primary home. They are all applicable for rental or investment properties only.

1 Like

#4

NOOOOOOOOH!!!

I thought we got a tax deduction for closing costs :frowning:

0 Likes

#5

You can include the closing cost as the cost basis when you sell the house.

1 Like

#6

Points on a purchase loan for an owner-occupant can be deducted in full in the year of the purchase.
Points on a refinance cannot be deducted for owner-occupants, but you probably can add them to the basis which determines cap gain when you sell.

Now, here’s something.

Points can be deducted. “Origination fee” or “underwriting fee” – not. Origination fees may be a % of the loan amount, just like a point. Underwriting fee should be a smaller flat fee, like $995. Of course, in some markets, that may equal a point!

2 Likes

#7

Closing cost and any re-modeling should be capitalized into purchasing price.

0 Likes

#8

Is anyone using HR Block tax software (desktop) to try to put in a mortgage interest deduction on a primary home?

It’s asking me for the 1098 form data, but not asking me for date of purchase or the loan amount which seems mighty fishy. I can’t tell if they’re expecting the bank to have put in only the amount of interest that is deductible, or if they were expecting the user to magically realize that they needed to adjust the numbers.

Anyone have insight into this?

0 Likes

#9

It is not pro-rated, whatever mortgage interest you paid+local taxes (transfer tax) and property tax, you can claim it for primary homes. If the loan is higher than 750k (I think current limit), you need to pro-rate it.

Since bank sends you and IRS 1098 form, if you do not properly pro-rate it, very likely you will get some IRS notice later, esp if you have to pay taxes. This may or may not happen, but it depends on luck.

Normally, banks will send you 1098 form, mandatory for them.They would have sent to your old address which you would have missed it. check your online bank statements, there should be tax form/statement for it. They will be reporting the same to IRS. You need to input the data. Or you can also calculate using final closing document+monthly statements.

0 Likes

#10

She’s asking why HR Block’s software is not auto calculating her mortgage interest deduction cap for her, not where her 1098 form is…

3 Likes

#11

Actually, I think he answered half the question, because HR Block’s software and forms and help files ALL imply to me that the 1098 is prorated. I can’t believe that it’s April 15th and the software hasn’t been updated by now.

1 Like

#12

And of course, being April 15, the wait for clarifying this from HR Block customer service is 1 hour. But that is my fault for waiting this long…

0 Likes

#13

Oh boy… We owe A LOT of Federal taxes. :frowning:

1 Like

#14

That’s IPO RSU vesting for ya…

1 Like

#15

Yeah. Plus presumably too little withholding.

And my husband’s tried in the past to say “Could you please withhold an extra $xyz per month” and they just kinda look at him blankly and say “How many additional deductions do you want?” And he says “Can’t you calculate that for me? Isn’t this your specialty?” And they look at him blankly and say “No. How many additional deductions do you want?” And he gives up.

0 Likes