I paid $10,000.00 as closing on my new house. I was under the impression that I would get this money back when I did my tax return. What happened?
Only certain parts of the money put towards the purchase of a residence are deductible in the year of the purchase. These are normally identified as “Points”. Even then the amount of your refund is restricted by the amount of your Federal Withholdings. Generally, if after all deductions are calculated you have a zero (0) tax liability, the amount of your refund is limited to those funds identified as Federal Withholdings on your W-2’s, 1099-R’s, or other information documents.
This is an important issue which is not often understood by home buyers. If you have any questions about taxes and home purchases, please give us a call.
