Will Buying A House Halfway Through The Year Help Me With My Taxes?
WіƖƖ buying a house halfway through thе year hеƖр mе wіth mу taxes? Rіɡht offs etc... I recently bουɡht mу first home thіѕ month ( June ) аnԁ wаѕ tοƖԁ thаt I wouldn't benefit frοm thе рυrсhаѕе thіѕ tax season coming...prior tο owning thе home I hаԁ nο rіɡht offs. WіƖƖ I nοt bе аbƖе tο υѕе itemized deduction bесаυѕе οf mу timing οf thе рυrсhаѕе? WіƖƖ I leave thе house out οf thе picture thіѕ tax season ?
It depends on how much interest you’ve paid by December. If that amount, in addition to any property taxes you’ve paid by then (check your escrow statements, as sometimes you pay your pro rata share of property taxes already paid by the previous owner) and any other deductions that you might have been able to claim in previous years since you couldn’t itemize (charitable donations, non-cash contributions, DMV fees, etc.) is higher than your standard deduction, then you’ll be able to itemize and take advantage of being a home owner.
Good luck! :0)
There are two issues you should consider. If you are a First Time Home buyer you will be eligible for a credit of $8,000 which you can take on your 2008 return with an amendment or on your 2009 return when you file it. Second it may just be true that the mortgage interest and taxes you paid will not bring your itemized deduction to a level greater than your standard deductions. That can not be determined without doing the calculation of a Schedule A.
You will have interest paid and probably property taxes paid in 2009. You will be able to deduct these; they will help if the total of your deductions is more than your standard deduction. There is an increased deduction for real estate taxes paid in 2008 & 2009 that some non-itemizers (people who don’t file Schedule A) can use to get the benefit of the real estate taxes. See this link http://www.irs.gov/newsroom/article/0,,i…
Also, If this was your first home, you may be entitled to up to $8000 first time home buyer credit. This credit has an election to treat the purchase as if made in 2008, thereby allowing you to take it on your 2008 taxes. If you have already filed those, you could amend and get a refund now. See the IRS FAQs link: http://www.irs.gov/newsroom/article/0,,i…
You only benefit from itemizing if your itemized total is more than your standard deduction. There’s not some time during the year that you have to own the house but for many people who buy midyear their standard deduction is higher.
You would have to file an admendment to get the $8k tax credit. Your refund will take about 3-4 months, after being accepted by the IRS. Hope this helped.