Tax season is in full swing with the April 15th deadline fast approaching. Now is a good time to gather your financial information to make sure you have everything organized when it comes time to pay your taxes within the coming month.
If you've purchased a home last year or done a mortgage refinance you will receive a Form 1098, which includes the amount of mortgage interest that you paid during the year. In most cases that amount is tax-deductible. You'll need to file an itemized Schedule A, but the savings will be worth it. Also, every dollar used to finance home improvement projects up to $100,000 reduces your taxable income dollar for dollar.
Your home is one of the largest tax write-offs you will have and will increase your refund (or decrease what you owe). So if you bought a home in 2013, make sure you receive all of the tax deductions and tax credits to which you’re entitled for the year. Here are some tax deductions for home mortgage interest and other home tax deductions:
· Property taxes and real estate taxes
· Mortgage interest paid
· Points you paid when you bought the house
· The interest on up to $100,000 borrowed on a home-equity loan or home-equity line of credit
· The premiums you paid for private mortgage insurance (for mortgages issued after 2007)
· Home improvements required for medical care