Tax Implications For First Time Homebuyers in Michigan

Tax Implications For First Time Homebuyers in MichiganBuying your first home will be one of your life’s most memorable and major milestones. Along with all the excitement that comes with being handed over the keys to your own home, comes a lot of responsibility. It helps to be prepared for what you can expect will occur after you sign the mortgage documents so that you’re not caught off guard with surprise financial obligations or even more responsibility.

At E&Y Agency, we work to arm our clients with as much tax information as we can so that new homeowners aren’t left scrambling to meet tax obligations. On the other hand, it is also important that new homeowners understand that not all the homebuying tax consequences require them to write checks to the government. There are plenty of tax benefits and incentives for first time homebuyers in Troy MI that can add up to money coming in, rather than money flying out the door of your new home! Here is a list of basic tax information for first time homeowners.

The Mortgage Interest Deduction

For first time homebuyers who take out a mortgage to buy their homes, the mortgage interest tax deduction can add up to a hefty tax refund. Home mortgage interest is the interest you pay on the loan that is secured by your home, either your main home or a second home. Interest you pay on your mortgage for the year can be deducted on your tax return if you file Form 1040 and itemize your deductions. There are specifics regarding mortgage interest deductions that may or may not apply to your mortgage situation, so be sure to consult with your tax expert at E&Y Agency to see exactly how your mortgage qualifies to certain deductions.

Property Tax Deductions

As a new homeowner, you’ll want to remember to retain your property tax bill each year. Homeowners are required each year to pay property tax that is assessed based on the value of their property, to their local government. Many homeowners opt to escrow their property tax payments into their mortgage loan and have it paid to the local governing agency when it’s due. Regardless of how it’s paid, the amount of property tax you pay each year is tax deductible.

Cash Back From The Seller Is Deductible

Keep your home buying contract handy during tax time. If the seller of your home reduced their asking price during contract negotiations, this amount is tax deductible and can add up to cash in your pocket.

How To Find Your Detroit Personal Accountant

At E&Y Agency, we understand that our clients are busy and it can be difficult to keep up with the latest tax changes that affect homeowners. This is why we offer personal tax preparation services to individuals who want to take advantage of all the tax benefits they’re entitled to. Contact our Troy MI accounting offices today at (248) 909-1331 for a free tax consultation.

 

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