State and municipal fees as well as mortgage interest can be deducted

“What are some property deductions I can take on my US income tax?

 Homeowners can deduct state and city property taxes on their federal income tax, as well as mortgage interest, said Roy Greenberg, a real estate attorney in East Hampton, New York.

Homeowners can deduct the cost of local property taxes on their federal tax return beginning in the year they purchased their home, Greenberg said. Even if the buyer will reimburse the seller for the taxes paid, the buyer is still entitled to the deduction, which he says many overlook when it’s time to file their income taxes.

Also, some homeowners with mortgages might not write a check to pay property taxes, but that doesn’t mean they’re not entitled to the deduction, he said. Homeowners often pay the tax as part of the monthly mortgage bill, and then the bank pays the property tax bill when it’s due.

Some people forget to take the deduction because they didn’t take care of the payment, Greenberg said, but it’s definitely deductible.

However, the Tax Cuts and Jobs Act of 2017 changed the amount of the deduction for 2018.

The legislation created a $10,000 cap on state and local tax deductions, according to the IRS. Homeowners used to be able to count all state and local taxes, which include property taxes as well as state and local income taxes, as deductions from their federal income taxes.

Mortgage interest can also be deducted, Greenberg said. But the amount of the deduction also changed in 2018.

“That used to be clearer, but now it depends on when you bought the house,” he added.

For recent buyers, mortgage interest on the first $750,000 debt is federal tax deductible, the IRS stated. But for those who took out the mortgage before December 16, 2017, up to $1 million of mortgage interest can be deducted.

Owners who rent their property for more than 14 days can take additional deductions. These include fees for professional services, supply and maintenance costs, and common charges.”

Source: Mansion Global