Monday Facts – 9 Easy Mistakes Homeowners Make on Their Taxes

MONDAY FACTS

HouseLogic is a free source of information from the National Association of Realtors covering home improvement, maintenance, taxes, finance, insurance, etc.
Here are excerpts from their article by Attorney G.M. Filisko:
9 Easy Mistakes Homeowners Make on Their Taxes:

  1. Deducting the wrong year for property taxes. Some taxing authorities work a year behind. Make sure you take the deduction for the year you actually paid.
  2. Confusing escrow amount for actual taxes paid. Some escrow payments include homeowners insurance. Deduct only the actual amount paid for real estate tax.
  3. Deducting points paid to refinance. Points paid to secure your mortgage may be deducted in full for the year you bought your home. Points paid to refinance must be deducted over the life of your new loan.
  4. Misjudging the home office deduction. It’s complicated and piques the IRS’s interest in your loan.
  5. Failing to repay the first-time homebuyer tax credit. If you obtained the original credit in 2008, you must repay 1/15th of the credit over 15 years. If you got it in 2009 or 2010 and stopped using the home as your primary residence, or sold within 36 months, you have to repay.
  6. Failing to track home-related expenses. File or scan and store home office and home improvement expense receipts.
  7. Forgetting to keep track of capital gains. If you sold your home you have to pay on profit. If you meet the requirements, a single individual can exclude $250,000 of any profit from taxes, and $500,000 if filing as a married couple.
  8. Filing incorrectly for energy tax credits. These credits are life-time credits.
  9. Claiming too much for the mortgage interest tax deduction. You are allowed to deduct mortgage interest on home acquisition debt up to $1 million plus up to $100,000 in home equity debt.
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