As tax season rolls around, new homeowners are paying their taxes for the first time as homeowners. There are many advantages to owning a home when it comes to your taxes, but it must be done correctly, or the IRS will come knocking on your door. To get you started, here are four huge tax mistakes homeowners should avoid.
Mistake No. 1: Wrong year, McFly
Your property taxes are tax-deductible, which is a huge perk of home ownership and can help a lot on taxes. However, some tax forms are a year behind. Make sure that you are being billed for last year’s property taxes DURING LAST YEAR, or you won’t be able to deduct anything. This can be a huge error that can end up with a giant tax bill. Even experienced homeowners can make this mistake. Just make sure that you know how your property taxes are assessed and you will be able to deduct them at the right time. Just make sure that the actual taxes you paid for 2016 ends up on your federal tax forms.
Mistake No. 2: Repay Your Credit, First-Timer
Homes bought from April 8, 2008, to May 1, 2010, could have received a first-time homebuyer tax credit of up to $7,500. Well, from 2010 on, it was time to pay this back every year, for the next 15 years. Even if you sold the home, you still have to repay that tax credit, so don’t forget that in your calculations.
Mistake No. 3: Refinancing Points are Points in Your Favor
When you bought your home, you paid in points to secure the loan. You can deduct these from your taxes to lessen your tax burden. Don’t forget these when you’re writing up your tax forms, they can be a huge deduction. However, if you buy back points when you refinance, you lose them in your write-off.
Mistake No. 4: If You Work at Home, Let Them Know
The new, simplified home office deduction makes it easy to claim your home office. Just claim up to 300 feet of your home as office space at $5 a foot, and you’ve saved $1500 if you use part of your home for work. Just make sure that you actually use it for that purpose.
People who want to get these tax credits next year should call us in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515 or Nashville at (615) 810-8555. You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. We work hard to make it easy on you. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?