The days are getting warmer and longer. Before long, spring will be in full bloom. And you know what that means… tax season is just around the corner!
If you’re a service member or Veteran who’s recently purchased a home with a VA loan, you may be wondering what tax benefits are available for first-time homeowners. Below, we’ve provided a complete list of homeownership tax benefits for military families.
Tax Benefits for Military Families & Service Members
Homeownership has its challenges. Owning a home is a big responsibility. You must stay on top of maintenance and attend to unexpected costs when they arise. But it has its perks, too, and tax breaks are one of them! Here’s a complete list of tax benefits for military families and service members:
Loan Closing Costs
You may be able to deduct certain closing costs that you paid when you took out your home loan. For military borrowers, some of these costs may include VA funding fees, mortgage points, and/or origination fees.
You should be able to deduct any interest you’ve paid on your mortgage. Simply add up the cost and deduct it on your federal tax return.
If you’re a first-time homeowner, this will have been your first year paying home property taxes. Most people choose to have their property taxes added to their monthly mortgage payments. However, they can also be paid annually or bi-annually. Either way, you’ll be happy to know that your property taxes can be deducted on your return.
If you had to move this past year due to a military order and Permanent Change of Station, you may be able to deduct your family’s moving expenses. Examples of tax-deductible moving expenses for military families include household goods, personal effects, storage, lodging, and travel expenses.
Home Equity Loan Interest
In some cases, it makes sense for a military borrower to take out a home equity loan or Home Equity Line of Credit (HELOC) to pay for a home improvement project. For both options, interest payments are tax-deductible.
Energy Efficiency Technology
The IRS offers tax credits to homeowners who invest in energy-efficient technology. That means that if you make certain upgrades to your home that improve its energy efficiency, you may be able to deduct a portion of the cost. Examples of tax-deductible energy efficiency improvements include energy-efficient exterior windows, doors, skylights, metal and asphalt roofs, insulation, solar electricity, and geothermal heat pumps.
Rental Property Costs
Military members who rent out their homes may be able to deduct some of the costs associated with running and maintaining their property.
Have Questions? We’re Here to Help!
Learn more about the benefits of being a first-time homeowner. Call Mortgage Solutions Financial today to speak to an expert.