New Home Owner - What can I deduct from my taxes?

Question

I just bought a house this August, what associated expenses and taxes can I deduct? Mortgage fees, closing costs?
Property taxes? Home Improvement $$?
Also, this will be the first time we've itemized, up until now we haven't had a reason to. Can we deduct medical expenses (co-pays, deductibles) and is there a minimum before you can do so? I'd bet we've spent at least $1K this year.

Married, with a child who is in daycare.....
So she is deductible plus a credit for her daycare expense

Answer 1

The first thing you need to do is apply for a homestead exemption to lower those taxes.

You don't say what state you live in. You can certainly deduct property taxes, mortgage interest, and certain closing costs on your Federal return. You cannot deduct home improvements as that is considered a capital expense.

You can deduct medical expenses only when they exceed a certain percent of your income. I think it was 7.5% last year so it takes some really hefty expenses to pay off. Hard to do if you have insurance. A portion of the insurance costs is deductible subject to that income percentage.

Answer 2

First the house--mortgage interest paid in 06; on your buy/sell agreement check to see if you paid any "points" as they too are deductible. Property taxes paid, also.

If you are married your deductions for 06 will have to be greater than $ 10,100.00 (standard amount) for it to be worthwhile to itemize. Your medical amount is that portion over 7.5% of your AGI. Example--if you make 30,000 then you have an amount of 2,250.00 that has to be subtracted from out of pocket medical and medical insurance. If you have only 1K of oop medical then you would have nothing to itemize there.

Answer 3

Mortgate interest, including points paid at closing.

Property taxes, including any pro-rata taxes on the HUD-1 statement.

Other closing costs can be used to adjust your basis but are not deductible.

Home improvements can be used to adjust your basis but are never deductible.

Unless you bought a farily expensive property it's not likely that you'll have enough in deductions to warrant itemizing this year.

$1,000 in medical expenses isn't enough to even think about itemizing.

Consult with your tax advisor for further information.

Answer 4

In addition to what others have mentioned, as long as you have enough total to itemize, you'll be able to deduct state and local taxes (or sales tax if that's more - there's a table for your state and family size, so you don't need to keep every receipt). You can also take charitable contributions. There are other items also - look at instructions for schedule A on irs.gov.

Answer 5

Mortgage interest (they send you a statement with the total amount) INCLUDING the "prepaid interest' you paid at closing.

Property taxes (again, including the prepaid amount.)

Home improvement money is just deducted if you sell the house and owe for capital gains.

Also, if you paid "discount points" for your rate to be lowered this is considered "prepaid interest" and is also deductible.

Answer 6

For a comprehensive list of deductible items, limits, phased outs and instruction, take a look at section 5 of IRS publication 17.
http://www.irs.gov/publications/p17/pt05.html

Best wishes.

Answer 7

you are able to deduct it in case you rented your abode to someone in the course of the year, yet for decrease than the area of the year that it became rented. you are able to also deduct an element in case you used your abode as an place of work.