Tips for Home Buyers
5 Documents You Need to Save Cash at Tax Time
Tax day may seem far away, but if you want to cash in on the real estate-related tax
perks of buying this year you need to be sure you’ve got these five documents
1. Mortgage Interest Statement
IRS Form 1098.
The meatiest real estate tax deduction on the books
today allows you to deduct 100 percent of the mortgage
interest you paid during the tax year. To get this
deduction, keep an eye on your mail for Form 1098
from your mortgage lender. This reports how much of
that interest you paid.
In a rush?
Check your lender’s online account
management service (likely where you
make payments online). Many post 1098s
digitally before they send paper copies.
2. Uniform Settlement Statement (HUD-1)
If you purchased recently, right after closing you should
have received your HUD-1 Settlement Statement.
The data on this form is invaluable during tax time.
It details prepaid interest, prorated property taxes,
and other potentially deductible fees.
Hint: The HUD-1 is usually printed on legal-sized paper
and shows the credits and debits for buyers or sellers.
Moving expenses are tax deductible if your move is
closely related to the start of a new job. The rule of
thumb: if you moved more than 50 miles to be closer to
your new workplace, you could be eligible. Consult your
tax pro for details on this credit and be sure to bring
your moving receipts.
3. Moving Expense Receipts.
Under the Non-business Energy Tax Credit, homeowners
who make qualifying energy efficient upgrades
can claim tax credits.
If you’ve recently installed energy efficient improvements
such as insulation, new windows or other
energy savers, you may be able to deduct 10 percent
of their cost.
4. Receipts from energy efficient home appliances & improvements.
Homeowners who’ve purchased in the last few years
using a Mortgage Credit Certificate may be entitled to
a pretty hefty tax credit.
MCCs apply as long as you live in the home and pay
a mortgage on it. But, they only apply to defray taxes
you actually owe – you can’t use them to get a refund.
If you have one, the MCC is a must-have as you start
your tax prep.
5. Mortgage Credit Certificate (MCC).
More Tax-Saving Documents
1. Property Tax Statements
2. Home Office Reciepts
3. Rental Income/Expense Statements
4. Unreimbursed Work Expense Receipts
If you own a home, it can’t hurt get professional help
from a tax attorney or certified public accountant to
make sure you maximize your deductions and
minimize the possibility of an audit.