HOME OWNERSHIP DEDUCTIONS

You know you can get a deduction for your mortgage interest, but what else can you deduct for your primary or secondary home?

At tax time, your house is not simply a home: it's a giant tax deduction. You get to deduct:

• Your property taxes.
• The mortgage interest on your primary residence, as well as any secondary residence you own. (There are limits, but relatively few taxpayers are affected.)
• The interest on up to $100,000 borrowed on a home-equity loan or home-equity line of credit, regardless of the reason for the loan.
• Points you paid when purchasing the house (or convinced the seller to pay for you).
• For homes purchased in 2007, the premiums paid for private mortgage insurance in 2007. (The right to this deduction disappears as adjusted gross income rises from $100,000 to $110,000 on a joint return and from $50,000 to $55,000 on a single return.)
• Home improvements required for medical care.

How Much Can I Save?

The actual amount of money you save on your annual income tax bill depends on a variety of factors, such as:

• Your filing status (single, head of household, married filing jointly, married filing separately)
• Your standard deduction
• Your other itemized deductions
• Your taxable income

Your home-related deductions plus your other itemized deductions must add up to more than the standard deduction, or they won't save you any money.

What Can't I Deduct?

You can't deduct the following payments for your primary residence:

• Dues to a homeowners' association
• Insurance on your home
• Appraisal fees for your home
• The cost of improvements to your home. But keep those receipts: They may help you reduce your taxes when you sell your home.

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Content provided by The Kiplinger Washington Editors courtesy of TurboTax, a registered trademark of Intuit Inc. Wachovia Corporation and/or its affiliates did not assist in the preparation of this material, and its accuracy and completeness are not guaranteed. The opinions expressed in this material are those of the author(s) and are not necessarily those of Wachovia Corporation and/or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy.

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