It is tax time! Owning a property can have several tax advantages, so be sure to take full advantage of them. The 2017 tax tips for MA homeowners below will help with your 2016 tax returns.
Obtain a Copy of Paperwork from Your Closing
If you purchased or refinanced a property last year, you should have received a form that details your expenses. Tax deductible costs are typically included in that paperwork. Examples of expenses that could be deducted are points, pre-paid interest, and property tax adjustments. Provide a copy of such paperwork to your tax preparer so they can be properly included.
Detail Home Improvement Expenses
Keep receipts from all repairs or other work completed on your property. Some repairs, such as those to improve energy efficiency (doors, windows, HVAC systems) may qualify for energy improvement tax credits. Adding renewable energy components (i.e. solar panels) qualify for yet another special tax credit. Even if your improvements do not qualify for any of these programs, they may be used in the future when calculating how much, if any, capital gains tax may be due on your property sale.
Calculate Property Taxes Paid
Taxes are another expense that is usually tax deductible. If you contribute an amount towards these taxes every month, that monthly amount is not the correct figure to deduct. Figure out the accurate tax amount using tax bills sent by your local tax collector and your closing statement (if you bought or refinanced this past year).
Have Your 1098 Form On-hand
Interest expenses on primary mortgages, secondary mortgages, home equity lines, and home improvement loans are likely tax deductible. Each lender will send a Form 1098. These statements will detail total interest paid during the 2016 year. It will also include charges for mortgage insurance, which is only deductible if you meet specific criteria.
Final Thoughts on 2017 Tax Tips For MA Homeowners
Retaining accurate records is important for taxes and minimizing your tax liability. Whether it is interest and tax payments or repairs, tracking costs can help with the current and subsequent tax periods. Check our blog for future property ownership and 2017 tax tips for MA homeowners.