Deductible — Home Buying Expenses

Understanding Your Deductible Home Buying Expenses Buying a home is one of the largest financial commitments you'll make, but it also opens the door to significant tax advantages. While many of your upfront closing costs are non-deductible in the year you purchase, several key expenses can lower your tax bill if you choose to rather than take the standard deduction. Primary Deductible Expenses

: If you paid "discount points" to lower your interest rate, they are often fully deductible in the year you paid them, provided the loan is for your primary residence and meeting other IRS criteria. Nondeductible Closing Costs deductible home buying expenses

Interest on home equity loans is only deductible if the funds were used to buy, build, or substantially improve the home securing the loan. Understanding Your Deductible Home Buying Expenses Buying a

This cap is reduced to $20,000 for those who are married and filing separately. Nondeductible Closing Costs Interest on home equity loans