This post is for the First time Homeowner.
Image courtesy of phanlop88 / FreeDigitalPhotos.net
You will still feel in a daze and confused as to what just took place.”I just bought a house and I owe on it for 30 years. I JUST BOUGHT A HOUSE, arghh!”
You will still have items coming in the mail or should (if you changed your mailing address). We will go over one of these documents you will receive around tax time (right now) from each of your lenders that you paid any points and interest to. It is the 1098 mortgage interest form.
At beginning of next year after purchasing your home, you will receive a 1098 tax form showing the amount of Points and Mortgage Interest paid during closing (of $600 or more). Save this form and place it with your W-2 and any 1099 forms you receive.
Also shown on your Settlement Statement (aka HUD or HUD-1) or as I like to call it “your big receipt”. You can verify the numbers with your HUD since they are listed there as well.
This form comes in handy if you itemized your deductions on your tax return. If not, still take this form with you to the Tax Preparer office. You might have other items you can use to deduct and still itemize.
Being able to use the form 1098 can save you a lot of money and cause a refund at tax time or lighten load paid to Uncle Sam.
Also, every year for as long as you have the loan, you should receive a 1098 form if you paid mortgage interest (including points) of $600 or more .
Image courtesy of ddpavumba / FreeDigitalPhotos.net
NOTE: I am NOT a Tax Advisor or CPA and I advise you to speak with one to gather whether it will benefit you personally to itemize or take a standard deduction. All information is just to be helpful =:)