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Closing Costs And Taxes
Are Closing Costs Tax Deductible Under the New Tax Law?
Here’s the scoop on what’s tax deductible when buying a house.
Basically, you’ll want to itemize if you have deductions totaling more than the standard deduction, which is $12,000 for single people and $24,000 for married couples filing jointly. Every taxpayer gets this deduction, homeowner or not. And most people take it because their actual itemized deductions are less than the standard amount.
But should you take it?
To decide, you need to know what’s tax deductible when buying or owning a house. Here’s the list of possible deductions:
The one-time home purchase costs that are tax deductible as closing costs are real estate taxes charged to you when you closed, mortgage interest paid when you settled, and some loan origination fees (a.k.a. points) applicable to a mortgage of $750,000 or less.
But you’ll only want to itemize them if all your deductions total more than the standard deduction.
Costs of closing on a home that aren’t tax deductible include:
Real estate commissions
Mortgage refi fees
Mortgage interest and property taxes are annual expenses of owning a home that may or may not be deductible. Continue reading to learn more about those.
I found my soulmate Victoria shortly after moving to California in 1990. We settled down in Corona to raise a family. I am a father of three boys Brandon, Pierce, and Evan. In my career I have worked ....