Tax Mistakes Homeowners Should Avoid – No one looks forward to tax season; unfortunately, it comes every year and it’s something everyone has to deal with. You don’t want to be the person making unnecessary mistakes on your taxes, especially when doing such can make you end up paying more taxes in the long run. Here are five tax mistakes you might not know about, that homeowners should avoid.
Not Tracking Home Improvements
If you bought a fixer-upper knowing that you would be putting a lot of time and money into your home, you should be keeping a detailed record of all of the expenses. Not all home improvements will qualify for a tax deduction, but if you made energy-efficient upgrades or a ramp to make your home wheelchair friendly, you will likely qualify for some type of deduction.
Not Using The Home Office Deduction Correctly
If you work from home or use your home office as a place to meet clients, conduct meetings, etc., you may be eligible for a deduction. However, this deduction can be rather tricky and there are a number of guidelines you need to follow. To ensure that you’re writing this off correctly, it’s best to seek the advice of an accountant or tax professional.
Deducting Refinance Points
When you refinance your home you’ll need to deduct points attributed to your home’s entire lifetime, not just in the year you refinanced. If this is entered incorrectly, you risk the inaccurate amount leading to an inaccurate tax statement.
Keeping The Simple Tax Form
When you were renting a property, the 1040EZ tax form was perfect for you; however, as a homeowner that’s no longer the case. Sure, it’s a lot simpler than the tax form you will fill out moving forward, but you will be missing out on a number of benefits that are available to you as a homeowner.
Choosing The Wrong Year
This is one of the most common mistakes among homeowners. As you file your taxes, this is an easy mistake to make; however, you want to make sure you’re deducting the taxes for the year that you paid them. Filing for the wrong year could cause you to miss out on the amount you should receive or it can cause you to be audited.
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