Owning a home changes your tax situation entirely. While the standard deduction is high enough that many homeowners no longer itemize, those who do often miss thousands of dollars in eligible write-offs during their first year of ownership.
1. Mortgage Discount Points
If you paid 'points' at closing to lower your interest rate, that money is considered prepaid mortgage interest. You can usually deduct the full amount of those points in the year you bought the house, even if the seller paid them for you as a concession.
Tip
Check Your Closing Disclosure
Look at Section A of your Closing Disclosure to see exactly how much you paid in origination points.
2. Property Taxes Paid at Closing
You likely reimbursed the seller for property taxes they had already prepaid for the year. This amount, listed on your settlement statement, is fully deductible in the year you close.
3. Mortgage Credit Certificates (MCCs)
If you used a state or local first-time homebuyer program, you may have received an MCC. This allows you to claim a direct tax credit (not just a deduction) for a portion of your mortgage interest every year.