Top three homeowners tax credits you should be using

Monday, February 4th, 2013 By

Homeowner Julius Wolfarth, 82, and a red-haired young woman.

Get happy about these homeowner tax credits! (Photo Credit: CC BY-SA/Charles & Hudson/Flickr)

If you’re a homeowner and are preparing to sit down and do your taxes – or hand them off to a tax preparer – you’ll want to make sure that you’re taking advantage of all the homeowner tax credits to which you’re entitled. Depending upon your location, income and the state of your home, there are three big money-saving tax credits most people can pursue: the Energy Property Tax Credit, Mortgage Insurance Deduction and New Homeowner Credit. These are the basics; for more info on each tax credit, consult with the Internal Revenue Service.

Homeowner tax credits No. 1 – The Energy Property Tax Credit

A tax credit that was reinstated for 2012, this green energy credit applies if you made any energy efficient upgrades to your home during the year. It could be Energy Star appliances, insulation in the attic or more. Expect to receive 10 percent back on building materials, up to $500 maximum.

Homeowner tax credits No. 2 – Mortgage Insurance Deduction

After a 2011 hiatus, the Mortgage Insurance Deduction is back on the menu for tax season 2012. If you have been paying mortgage insurance, take advantage of this as one listing on your itemized federal income tax form. Depending upon your specific situation, it may be possible for you to deduct up to 25 percent of what you paid for the mortgage insurance on your 2012 tax form.

Homeowner tax credits No. 3 – New Homeowner Credit

Perhaps the most popular homeowner tax credit around, this winner began in 2008 and ran through 2010. While it is technically not available anymore on a brand new home purchase. However, if you purchased a new home in 2009 or 2010 and never took advantage of this juicy tax credit, you may still be able to go back and amend your tax return.

So get cracking! Even if you purchased your new home in 2012, it may be possible for you to qualify for a tax credit of 20 percent of the mortgage interest you pay each year, for the next three decades. This credit is only offered by certain mortgage lenders, so read the find print. If your tax bracket is too high, you may also be ineligible.

Sources

Bright Nest

IRS

Mint Life

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