Uncle Sam encourages homeownership by American taxpayers – apparently with considerable success. For many, the deductions and other tax benefits that come with owning a home are a major deciding factor in buying a home.
The biggest homeowner tax break for most people is the mortgage interest deduction, taken on Schedule A, Form 1040. You can generally deduct the interest portion of your monthly mortgage payment with your other itemized deductions.
Mortgage interest is generally interest on any loan that is secured by your home or second home. If you took out a loan to buy or build a home, you refinanced a mortgage, or you took out a second mortgage or home equity line of credit, the loan is generally secured by your home.
There's not usually much doubt which home is your main home. That's generally the home where you receive your mail and spend most of your time. Your second home can be a house, condo, mobile home, motor home, or even a boat, as long as it has sleeping, cooking, and toilet facilities.
If you have more than one second home, you can only deduct mortgage interest that you incurred on one second home at any given time during the year.
If your acquisition mortgages on your main home and second home together are less than $1 million ($500,000 if you are married filing separately), your deduction is not limited.
However, if you took out your mortgage after October 13, 1987, and your total mortgages are over these limits, you can only deduct your interest expense on the balance of your loans up to the limit.
If you have a home equity loan on your home, you can only deduct the interest on up to $100,000 ($50,000 if married filing separately) of the balance, or the total of each of your home's fair market value reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. This should be calculated as of the date the last debt was secured by each home.
You can deduct points when you purchase or refinance a home. Points are the amount you spend to bring down your interest rate on the loan. They are based on the amount you borrow – one point equals 1% of the amount of the loan.
When you buy or build your home, you can deduct the full amount of points you pay in the year you pay them. If you pay points when you refinance, you deduct the points over the life of the loan.
Real estate taxes are another major expense for homeowners – but they can also be another important tax deduction. If you pay your real estate taxes with your mortgage payment, you deduct the real estate taxes your escrow company actually pays on your behalf, not the amount you pay into the escrow account.
October 9 — Everyone
Federal Holiday (Columbus Day) - Details
October 11 — Employees who work for tips
If you received $20 or more in tips during September, report them to your employer - Details
October 15 — Individuals
If you have an automatic 6-month extension to file your income tax return for 2017, file Form 1040, 1040A, or 1040EZ and pay any tax, interest, and penalties due - Details
October 15 — Corporations
File a 2017 calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension Details
October 15 — Partnerships
Electing large partnerships: File a 2017 calendar year return (Form 1065-B). This due date applies only if you were given an additional 6-month extension - Details
October 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in September.
October 31 — Certain small employers
Deposit any undeposited tax if your tax liability is $2,500 or more for 2017 but less than $2,500 for the third quarter.
October 31 — Federal unemployment tax
Deposit the tax owed through 09-if more than $500.
October 31 — Social security, Medicare, and withheld income tax.
File Form 941 for the third quarter of 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules .If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until 11-10 to file the return.