Closing Costs and Moving Expenses tax deductible

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Real Estate

Most expenses at closing on the purchase or refinance of a home are added on to the cost of you home and not are tax deductible. Only the following would be deductible:

1. Interest paid at the time of purchase ( the charge at closing up to the first payment date).

2. Real Estate taxes charged to you and not reimbursed by seller.

3. Points or origination fees. On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization

Title fees, real estate commission, transfer stamps, credit report costs, costs for an abstract, attorney fees, are not deductible.

Moving expenses are tax deductible, but only if:

5. Your new job or job transfer is at least 50 miles farther from your home than the old house was. l you had no previous job, the new one has to be at least 50 miles from your old house. l your move makes your commute shorter than it was prior to the move. l If you are in the armed forces and had a permanent change of station. l If you’re working full-time (you expect to work at least 39 weeks out of the next 12 months). l If you incur expenses within one year from the day you reported to work at your new job.

6. The required length of time is waived in cases of a new job for members of the armed forces, those transferred by an employer, those who lost a job through no fault of their own, and those returning to the United States from abroad when they retire (or their survivors).

Qualified deductions include:

7. Packing and transporting household goods l Mileage for use of your own car (or gas and oil expenses) l Tolls and parking fees on the trip l Up to 30 days' storage of household goods

8. Disconnecting and connecting utilities l Transportation and lodging for yourself and members of your household while traveling to the new home. No longer allowable: $3,000 more for up to 30 days’ temporary living expenses, house hunting trips and costs of selling or buying a home.