The tax deadline is right around the corner! Do not miss out on money saving tax benefits of real estate ownership. The Farmington Hills Michigan homeowner tax advice in this blog may help with your tax returns.
Look for the 1098 Form from Your Mortgage Company
Interest paid on primary mortgages, second mortgages, home equity loans, and home renovation loans are often tax deductible. You will receive a mortgage statement, a Form 1098, from each mortgage company. It will detail amounts paid during the 2016 year. It may also reference amounts paid for mortgage insurance, which might be deductible if you meet the income and other requirements.
Calculate Money Spent on Property Repairs
Keep track of all home repair expenses. Some repairs, such as energy efficiency upgrades (windows, doors, heating systems) could be eligible for special tax credits. Renewable energy improvements (i.e. solar panels) qualify for an additional tax credit program. Even if your upgrades do not qualify, they may be helpful years later when calculating how much, if any, capital gains tax may be payable on your property sale.
Look for Copies of Closing Paperwork
If you purchased a house or refinanced a mortgage this past year, you should have been given a form that details closing expenses. Tax deductible closing expenses are typically detailed in that paperwork. Examples of expenses that might be tax deductible are mortgage points, pre-paid interest, and pre-paid property taxes. Provide a copy of closing paperwork to your tax preparer so they may be properly deducted.
Find Out What Was Paid for Property Taxes
Taxes are another tax deductible home owner cost. If you pay an amount towards these taxes every month as part of your home loan payment, that figure is not the proper amount to deduct. Find out the accurate tax paid based on tax bills sent by your local tax collector and your closing statement (if you purchased or refinanced this past year).
Summary of Farmington Hills Michigan Homeowner Tax Advice
Maintaining good records is critical when it comes to taxes and reducing your taxes owed. Whether it is mortgage interest and city/town taxes or home improvements, knowing costs can help with the 2017 and subsequent tax periods. Follow our blog for future home ownership and Farmington Hills Michigan homeowner tax advice.
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