According to the 2000 census, there were more than 8.7 million mobile homes in the United States, accounting for 7.6 percent of housing units nationwide. The percentage shows the significant growth in the mobile home market share since 1950, when mobile homes accounted for less than 1 percent of housing units, according to the United States Census Bureau. As long as mobile homes are used as a residence, their owners are eligible for a number of tax credits and tax deductions.
First Time Home Buyer Tax Credit
If you did not own a home for at least three years before purchasing a mobile home between Jan. 1, 2009, and Dec. 1, 2009, you may be able to claim a tax credit of up to $8,000 from your taxes. For you to qualify, your income must be below $75,000 if you are a single filer or $150,000 if you are married and file a joint return. To calculate your credit, multiply the cost of the home by 10 percent. Use the smaller of the result or $8,000. For example, if you bought a home for $40,000 your credit would be $4,000 but if you paid $400,000 for your home your credit would be $8,000. This is a tax credit, which is better than a tax deduction because it reduces your tax liability rather than your taxable income. It is also a refundable credit, meaning that if the credit exceeds your tax liability, the excess credit will be paid to you as a refund check.
Mortgage Points
If you had to take out a mortgage to purchase your mobile home, you probably paid mortgage points. Each point is equivalent to 1 percent of the home's value. These points are deductible in the year that you pay them, so if you had to pay $2,000 in mortgage points you can take a $2,000 itemized deduction from your taxes. In order to claim an itemized deduction, you cannot take the standard deduction.
Mortgage Interest
Mobile homes also qualify for the mortgage interest deduction. The interest on the first $500,000 of a mortgage can be taken as an itemized deduction, even though you're not likely to have spent anywhere near that amount on your mobile home. Joint filers can deduct the interest on the first $1 million of a mortgage. For you to qualify for the deduction, the money from any mortgage loan must be spent to buy or improve your mobile home.
Mortgage Insurance Premiums
Mortgage insurance premiums are charged as part of the monthly cost of a mortgage for individuals who have less than 80 percent equity in their mobile homes. Since 2007, the government has allowed borrowers to deduct this mortgage expense from their taxes as an itemized deduction. As of 2009, this deduction was to last only until 2010 unless extended by Congress.
Real Estate Taxes
If you have to pay real estate taxes on your mobile home to state or local governments, you are allowed to take a tax deduction for that expense. There are two parts to this deduction. The first is an above-the-line deduction for the first $500 of real estate taxes for singles or $1,000 for joint filers. Above-the-line deductions can be taken on top of the standard deduction, so you do not need to itemize to take them.
The second part of the deduction is an itemized deduction for any amount above the limit for the first part of the deduction. For example, if you were single and paid $1,200 in real estate taxes, you could deduct $500 as an above-the-line deduction and $700 as an itemized deduction. However, you do not have to take the itemized deduction if you do not want to itemize your deduction.
Tags: itemized deduction, mobile home, mobile homes, your mobile, your mobile home, estate taxes, real estate
