There are typically many property ownership tax benefits in Waltham MA through use of tax deductions. Deductions reduce your taxable earnings and therefore lead to fewer taxes. It is helpful to understand the tax impact before purchasing or when analyzing renting versus buying. This article offers details on Waltham MA property ownership tax benefits.
Tax Deduction Requirements
Not everyone can claim tax deductions. When completing your taxes, you can opt for the standard deduction or itemized deductions, whichever results in less taxes. If you own a low priced Waltham MA home, the deductible expenses may not total higher than the standard deduction. Other financial variables may factor in as well. Only an accountant can offer a true evaluation of the tax affects of owning a Waltham MA residence taking into account your personal finances.
Usable Home Expenses
Only the interest part of your loan payments are tax deductible. In the first few years of owning a Waltham MA property, you get charged primarily for interest than anything else. Therefore, the total deductible interest is much higher when you first own real estate than in subsequent years. Your loan provider will send you a statement each year outlining the mortgage interest paid on your Waltham MA property.
Waltham MA real estate property taxes are also be tax deductible. Real estate taxes are an annual charge but are typically billed in quarterly amounts. These taxes can be included in your mortgage payments, but be sure to keep copies of the property tax bills mailed directly to you. The amount in mortgage statements are sometimes not accurate.
Lender’s Mortgage Insurance
If you first bought your Waltham MA residence within a specific period of time and if you are under a certain income bracket, you may be able to deduct MI payments. MI is charged on a monthly basis for loans more than 80% of the home value and does not disappear until the balance drops below the 80% level.
Points and Other Charges
Be sure to keep a copy of your closing settlement statement. Certain charges such as points, adjusted real estate taxes, and pre-paid interest could be deductible. Give the documentation to your tax preparer.
Details On Waltham MA Property Ownership Tax Benefits
The above is details on Waltham MA property ownership tax benefits and refers to primary residences. If you have investment real estate, the variety deductions may be different. This information is meant solely as a general overview. Always consult with a tax professional for sound guidance specific to your financial profile or to your type of residence.