Its that time of year – everyone is organizing receipts and information for tax preparation. If you bought a home this year, refinanced your home or made energy improvements to your home, don’t overlook these important deductions.
- MORTGAGE INTEREST – the interest paid on your mortgage is probably your biggest allowable deduction.
- POINTS – If you purchased a home in 2016 and paid points to get a better interest rate, that expense is tax deductible. Points on refinance loans and home equity loans are also deductible but must be spread over the life of the loan instead of all in one year’s return.
- ENERGY CREDITS – If you made any improvements that improve the energy efficiency of your home you may qualify for a tax credit. Those items could include insulation, windows, doors and roofs. A tax credit is better than a deduction because its a dollar-for-dollar savings instead of simply saving you whatever tax you paid based on your income bracket. There are limits on energy credits depending on what you purchased, so be sure to check with a tax professional.
- PROPERTY TAXES – Property taxes paid on your primary residence are deductible. You may complain about your real estate taxes, but at tax time they work in your favor and can save a lot on your tax return.
Check with your tax professional to be sure you’ve taken advantage of all the possible tax savings on your 2016 taxes and going forward, keep receipts and information for this year organized to make next year’s tax preparation job easier.