6 LastMinute Real Estate Tax Tips For Total Procrastinators
April 15.No other date inspires such paralyzing anxiety.Glaring from the pages of your calendar, it’s an ever-present reminder that Uncle Sam wants—no,needs—you to file your taxes.
Well, you don’t have much time left. So get busy! Whether you own or rent, there are real-estate-related tax savings for all to claim—if you file on time:
Home energy tax credit: This credit allows homeowners to take advantage of alternative-energy upgrades. If you decide to install solar panels, geothermal heating systems, or even a fuel cell, you can get a credit for 30% of the cost of the equipment. (You probably knew that when you installed them, right?)
Home office deduction: Both renters and homeowners can take advantage of this one. As a general rule, you must use a part of your home regularly and exclusively for business purposes. If you use the “Simplified Option,” you multiply the square footage of your office (300 is the maximum allowed) by a rate of $5. With this method, the deduction is capped at $1,500. If you use the “Regular Method,” you can deduct certain costs—part of your rent or mortgage interest, taxes, and utilities paid.
Mortgage interest deduction: Homeowners can use this deduction for their primary residence as well as a second home. Both first and second mortgages, as well as a home equity loan, qualify for the deduction.
Tax tips for sellers: Those who sold a home in 2014 can deduct all costs associated with the sale—commissions, closing cost credits, staging costs, fees associated with the sale. And remember, the IRS allows single people to keep $250,000 of profit from their home sale; joint filers get up to $500,000. Any sum above that is subject to capital gains taxes.
Moving expenses: If you relocated for work, you may be able to deduct those expenses. According to the IRS, your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. Surprisingly, the IRS makes this easy to figure out through a handy Q&A format.
Finally, double-check everything. The IRS says filers make these eight common mistakes: wrong or missing Social Security numbers, using the wrong name (did you get married? divorced?), math mistakes (naturally), errors in figuring credits or deductions (are those really errors?), forgetting to sign the form, giving the wrong bank account number (if you want your refund direct deposited, get the routing number right!), and not knowing their electronic filing PIN.
Article written by Chrystal Caruthers for realtor.com.
Kathleen relocated to the Outer Banks of North Carolina with her husband and three children from the Philadelphia and Stone Harbor, NJ areas. One of her greatest pleasures is introducing people to the....