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March 9, 2020
Question

I purchased my home in December 2019 but did not pay interest so I do not have a 1098. Do I not get a tax break for buying a house?

  • March 9, 2020
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2 replies

VolvoGirl
Employee
March 9, 2020

Only for Mortgage interest paid and property tax. And only if you itemize deductions.  But since the Standard Deduction has increase even those won't give you a bigger deduction.

 

For 2019 the standard deduction amounts are:

Single 12,200 + 1,650 for 65 and over or blind

HOH 18,350 + 1,650for 65 and over or blind

Joint 24,400+ 1,300 for each 65 and over or blind

Married filing Separate 12,200 + 1,300 for 65 and over or blind

VolvoGirl
Employee
March 9, 2020

They always tell you that buying a house will be a big write off or deduction. Most of the time buying a house does help with deductions but not usually for the first year. Because you don't have a full year of interest payments and property tax. Maybe next year you might have enough to itemize. And then you only get the benefit of the amount that puts you OVER the Standard Deduction. So it might not be much help.

Employee
March 9, 2020

Unless you paid some mortgage interest, property tax, loan origination fees or private mortgage insurance in December--no.

 

 

Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, private mortgage insurance (PMI) and loan origination fees (“points”) that you paid in 2019.  You should have a 1098 from your mortgage lender that shows this information.  Lenders send these in January/early February.

 

 

 

Home Ownership

 

There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.

 

Buying a home is not a guarantee of a big refund.  Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home

ownership deductions.

 

Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees.  There are no deductions for appraisal, inspections, title searches, settlement fees. etc.

 

Your down payment is not deductible.

 

Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.

 

Home improvements, repairs, maintenance, etc. for your own home are not deductible. 

 

Homeowners Association  (HOA) fees for your own home are not deductible.

 

 

 

HOMEOWNERSHIP DEDUCTIONS

 

It is very hard for a lot of people to use itemized deductions now that the standard deduction is so much higher.  Your home ownership may not have any effect on your tax due or refund, especially if you purchased the house late in the year.  

Standard Deduction
Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes. 

 

2019 Standard Deduction Amounts

 

Single $12,200   (+ $1650 65 or older)

Married Filing Separate  $12,200   (+ $1300 if 65 or older)

Married Filing Jointly $24,400   (+ $1300 for each spouse 65 or older)

Head of Household $18,350  (+ $1650 for 65 or older)

 

https://ttlc.intuit.com/questions/2926910-why-didn-t-my-refund-change-when-i-entered-my-mortgage-interest-and-property-real-estate-tax

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**