So you just bought your new home and you are wondering what tax advantages it is going to offer you, or everyone has been telling you to buy a home for the tax advantages. What does this mean? Well, as a new homeowner you will be filing a Schedule A with your tax return to take advantage of owning your new home. On this form you will be able to deduct the interest that you pay on your mortgage for up to a loan amount of $1,000,000. You will also be able to deduct your property taxes that you pay for the property. These deductions will directly offset your wage income when it is deducted from your adjusted gross income in determining your taxable income.
You may also be entitled to a first time homebuyer credit. This credit is as much as $8,000 and is available for a limited time to first time homebuyers. A first time homebuyer is defined as someone that has not owned a home within the last three years. All purchasers must be first time buyers to qualify.