Here are some best practices:
February 06, 2014
It’s officially tax season! That may send shivers down your spine, there’s better news if you bought a home, moved because of a job or paid a mortgage or property taxes in 2014. You may be able to claim more deductions, and put more money back in your pocket.
Here’s 5 common overlooked deductions:
Moving expenses. To qualify to deduct moving expenses, you must meet a 3 part test: closely related to the start of work, distance and time. First, you must have spent money on a move within one year of starting work in a new location. Next, your new work location must be at least 50 miles farther away from your old home than your old job was. And finally, you must work full-time for at least 39 weeks during your first year in that new job.
Mortgage interest. Like most homeowners, a good chunk of your mortgage payment likely goes toward interest on your loan. The good news is all of this interest is deductible in a lot of cases! There are limits on this rule if you refinanced, have a loan for more than $1 million or own multiple properties.
Home Related Tax Breaks
Property taxes. You can include all property taxes you paid, according to your 1098. If you bought your home in 2014, you can also count taxes you reimbursed the seller for-that amount will be on your settlement sheet.
Points. These are prepaid interest, and are used to obtain a mortgage. Like mortgage interest, there are limits on how large your mortgage is, and how the points were paid when you bought your home.
Home improvements for medical care. For people with disabilities, home improvements that are required by a doctor may be deductible. In a rented house (where other costs were not reduced by a landlord), these costs may be listed as medical expenses.