Bought a House

Today TaxMama® hears from Atomicar in the TaxQuips Forum with this question. “We bought a house in December 2011 and moved in first day of 2012. What expenses can we deduct? (I know we can’t deduct house hunting or moving expenses.).”

Congratulations Atomic!

That’s got to be a wonderful feeling, getting your own home.

First of all, did you get any 1098s from the mortgage lender? You should have paid the first month’s interest.

Look at your escrow closing statement. You may have points or property taxes that were prepaid. Do NOT deduct the property taxes that appear in the RESERVES part of the HUD-1 statement.

For 2011, you may still deduct the PMI – the mortgage insurance payments. However, if you paid a large sum, that covers several years. You may only deduct one year’s worth. In 2012, the PMI deduction is gone (unless Congress renews it later this year).

That’s about it for 2011. In 2012, you’ll have substantial deductions for property taxes and mortgage interest.

Enjoy your new home. And don’t spend ALL your weekends doing repairs and gardening.

And remember, you can find answers to all kinds of questions about home ownership and other tax issues, free. Where? Where else? At www.TaxMama.com.

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