Tax Credits For Homeowners

If you are a homeowner, you may qualify for taxcredits for homeowners when you file your income tax return.  These homeowner tax credits can reduce your tax liability tremendously and include mortgage interest, real estate tax, sales and first time homebuyer’s credit. These credits entail that you keep accurate record and you shop wisely.

Things you need to obtain tax credits for homeowners.

• Energy efficient appliances
• Mortgage Interest
• Schedule A
• Sales receipt

1. Request the mortgage interest credit. The mortgage interest credit allows you to deduct the interest you pay on your home mortgage.  Request your 1099 from your mortgage company. Normally, they send the 1099 form to you in January or early February.  After you have received the 1099 from your mortgage company, fill out schedule A and itemize your deduction. Crunch your itemization amount and compare it to the standard deduction and see if you are going to come out ahead by itemizing or whether the standard deduction offers you the better deduction.
2. Apply for the first time homebuyer’s credit. If you brought a home in 2010, you maybe able to claim a tax credit of up to $8000 for your primary home.  This program requires that you purchase the home by May, 1, 2010 or that you had a binding contract by May 1, 2010. Get your binding contract, your HUD statement and fill out form 5405 and submit to the IRS with your tax forms.
3. Save your state and local sales tax receipts. Take these receipts and compare them to your local income tax receipts to see which will provide you with the highest tax credit.  Add the credit on schedule A along with other eligible itemization expense and file your return.  
4. Think about alternative energy for your home and buy energy efficient equipment.  Look for appliances and equipment that have the manufacturer’s tax credit certification statement.   This certification is not the same as the Department of Energy’s Energy Star label so make sure before you purchase.   These energy efficient appliances can provide you with 30 percent off your tax liability. Items that falls under this category includes, solar hot water heater, geothermal heat pumps, and fuel cell property and the labor cost involve.  

 There are many ways to save on your taxes due to being a homeowner. So, review your options and start saving money on your taxes today.