The income tax deadline is Tuesday, April 17, 2018! Do not miss out on money saving tax advantages of property ownership. The Massachusetts homeowner tax advice in this blog may help with your taxes this year. However, keep in mind that tax law may be changing soon, based on bills currently being discussed in Congress!
Find Copies of Closing Paperwork
If you bought a home or refinanced a home loan last year, you would have been given a form that outlines the expenses. Many of these costs can be used as deductions on your taxes and might not be included in other paperwork. For example, you may have paid points, taxes, and mortgage interest. Give a copy of closing statements to your accountant so they may be properly deducted.
Calculate Amounts Spent on Property Renovations
Hold onto expenses from any repairs or other work completed on your property. Some repairs, such as those to increase energy efficiency (windows, doors, HVAC systems) could be eligible for energy tax credits. Renewable energy improvements such as solar panels qualify for an additional tax credit program. Even if your upgrades do not fall under these categories, you will need this information when you go to sell your property.
Include Property Taxes
Taxes are another tax deductible homeownership expense. If you pay an amount towards these taxes each month as part of your home loan payment, that monthly total is not the proper dollar value to deduct. Find out the accurate tax paid using invoices sent by your local city or town and your statement from the closing.
Have Your 1098 Form On-hand
Mortgage interest on first mortgages, second mortgages, home equity lines, and home renovation loans are commonly tax deductible. You will receive a statement, also known as Form 1098, from each lender. It will detail the amount of interest charged during the 2016 year. It may also note charges for PMI, which may or may not be used based on your finances.
Summary of Massachusetts Homeowner Tax Advice
Keeping accurate records is a must for taxes and getting the most out of your home ownership status. Whether it is mortgage interest and property taxes or home improvements, knowing expenses will help with the current and subsequent tax years. Check our blog for additional home ownership and Massachusetts homeowner tax advice.