Tax season is officially over! To share our excitement with you, we’ve compiled some information on how to prepare for next year’s tax season—after all, it’s never too early to start the planning process.
If you’re selling a home, in order to purchase your new home at Ross Bridge, you can add the price of materials and labor—used for home improvements such as plumbing, wiring or a new roof—to the basis of your home, thus reducing the tax owed on the sale of your home.
Don’t forget about the best tax deduction of all! If you just purchased a wonderful new home here at Ross Bridge, you can deduct your real estate taxes, qualifying mortgage interest, and any mortgage interest premiums.
When you purchased your new home, chance are you are paying some type of Private Mortgage Insurance, if your down payment was less than 20%. As long as your mortgage originated after January 1, 2007, your PMI can be deducted from your tax return, assuming of course that you have a PMI.
If you paid mortgage points on your home purchase or home refinance, those points may be eligible for deduction on your tax return too. These points are generally referred to as origination fees and are charged by the lender to originate the loan. The points are often a percentage-based fee and can usually be deducted in their entirety when paid the same year.
Love working at your desk in your pajamas? If your primary office is your home, you might be able to deduct your home office. It should be calculated as a percentage of your mortgage, utilities and repair bills in proportion to your office space in your home.
For more information, check out Realtor.com and the IRS website for specifics. (IRS LINK: http://www.irs.gov/pub/irs-pdf/p530.pdf)