Avoid Extra Paperwork And Penalty Fees With These Tips
During tax season you are reminded of all of the benefits of owning a home as they help you maximize the check you receive from the IRS. If, however, you misfile your taxes you could be regretting the extra paperwork or penalty fees your Texas home can bring. To help you, here are a few tax tips reminding you to skip these common mistakes.
- Deducting The Escrow Amount: It is not safe to assume that the amount your lender escrows you for property taxes are the amounts you can deduct. Make sure that you deduct the actual taxes paid instead of simply copy-pasting the escrowed amount.
- Deducting Refinancing Points All At Once: When you first buy your home, you can deduct the points you paid your lender all at once. When you refinance, though, you deduct those points over the life of your loan. For example, if you paid $1,500 in points to refinance to a 15-year term, you can only deduct $100 a year.
- Deducting The Wrong Year: Your tax deduction for your property taxes should reflect the year you actually paid them. That means that even if your taxing authority does not bill you for your 2013 taxes until 2014, you still deduct them from your 2014 taxes because you paid them last year.
- Deducting Too Much: There is a cap on how much mortgage interest you can deduct. You are only allowed to take a deduction for debt of up to $1 million. You can also deduct $100,000 in home equity debt on top of that.
Remember to consult with a tax professional so you can best take advantage of the benefits of homeownership this tax season and avoid unnecessary audits. With all of the tax benefits your home offers you, it is important to protect it. For all of your homeowner’s insurance needs in Carrollton, Coppell, North Texas, and the entire state, contact Mike Leonard Agency.