It is tax time! Take advantage of tax discounts provided to property owners. The Southern CA home ownership tax tips in this article may help with your tax preparation.
Retrieve a Copy of Paperwork from Your Closing
If you purchased or refinanced a house in 2016, you should have been given a form that details closing expenses. Many of them may be applied as deductions on your income taxes and may not appear in other paperwork. Examples of costs that may be deducted are points, pre-paid interest, and property tax adjustments. Provide a copy of such statements to your tax preparer so they may be properly deducted.
Refer to the Form 1098 from Your Mortgage Company
Interest expenses on primary mortgages, secondary mortgages, home equity lines, and home repair loans are often tax deductible. Each mortgage company will provide a mortgage interest statement to you. These statements should specify amounts paid during the previous year. It may also include charges for PMI, which may be deductible if you qualify.
Find Out What You Paid for Property Taxes
Property taxes are another cost that has tax benefits. If you contribute tax money into escrow every month, that monthly total is not what you should deduct. Figure out the correct total based on invoices sent by your local municipality and the statement from your closing.
Calculate Money Spent on Home Improvements
Keep receipts for all property repair costs. Some improvements, such as energy efficiency improvements (windows, doors, heating and air conditioning systems) may qualify for energy tax credits. Renewable energy upgrades such as solar panels qualify for an additional tax credit program. Even if your upgrades do not qualify for any particular tax credits, this information may help decrease any taxes that might be owed on your future property sale.
More on Southern CA Home Ownership Tax Tips
Retaining good records is a must when it comes to taxes and taking advantage of your home ownership benefits. Whether it is interest and tax payments or home renovations, tracking expenses can help with the 2016 and subsequent tax periods. Check our blog for more property ownership and Southern CA home ownership tax tips.
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