Every year it happens. Every year we act as though we weren’t expecting it. And then…
As a homeowner, you’re undoubtedly aware that there can be some tax advantages to owning your own home. But are you taking full advantage of whats out there? Are you up to date on the current rules and laws? If you’re like most of us, probably not. The following information contains some helpful tips and reminders to keep in mind when preparing your taxes this season. For more information or questions, be sure to consult with your tax advisor, or feel free to contact my tax guy, Mike Johnson-CPA, P.C., who was kind enough to provide the following information.
Tax Laws Keep Changing…Keep these in mind while you gather records.
Many favorable tax rules were extended by the major tax bill last December. Not all rules got the same treatment. Some expire this year, some expire after 2012.
*HOME ENERGY CREDITS. Two special credits for 2011- one large, one small.
Generation. -Big credits apply if you generate energy. Solar is the most common, but wind, geothermal and fuel cell devices qualify. These reduce your taxes by a full 30% of what you spend. There’s no upper limit. If the credit wipes out your tax, the excess carries to the next year. You’ll get the full benefit. Credits apply for any property where you reside, even a vacation home. But, no pools or other recreation use. These are expensive projects, but the tax credit gives a true 30% discount.
Conservation. -Energy-saving improvements to your main home offers less help. Look for costs to install insulation, doors, windows, skylights, certain furnaces, heat pumps and air conditioners. Main home only- no vacation or rental properties. You get only 10% of the first $5,000 you spend- with a big catch. The $5,000 is your combined expenditure for 2006, 2007 AND 2011. Yep, sounds crazy, but you’ll need to dig out information from ’06 and ’07. Possible catch. IRS says you need manufacturer’s statement that the device qualifies- keep the brochure or print the information from their website. We haven’t heard the final word, but those might need to be sent with your return.
Last year for this one. Form 1098 will show the interest you paid on your mortgage. It should also show any mortgage insurance. This can be deducted along with the interest.
If you had a loan modified or lost a property in a foreclosure or short sale, lots of details are needed. Your problems are not behind you until the income tax issues have been dealt with. You might have income from the cancellation of part of the mortgage. If IRS forms have arrived (1099-A and/or 1099-C), you’ll need to present those to your tax preparer. You’ll need to gather as much information as possible about what really happened. A complete history of loans for the property, mortgage statements are helpful… These cases can involve more than simply tax law, so please be as thorough as possible.
Got Everything You Need??… Here’s a list of the things most often forgotten…
*Bought, Sold or Refinanced? You’ll need a copy of your settlement statement. It shows the details. Find it, or else gather everything…
*Property Tax. Find the amount actually paid during the year on your home and other real estate.
*Rental Managers. If you have a rental home and have hired a property manager to run it, they send YOU a Form 1099 reporting the rents.
**The above information was provided by…
Michael L Johnson, CPA, P.C.
5607 S. 77th Street, Ralston, NE 68127
Posted In: Community News