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I was recently reading an article out of the National Association of Realtors that talked about common mistakes made during tax season. In order to clear things up, I'm going to list them off here:
- Deducting the Wrong Year of Taxes: In our area, the taxes you are paying right now are the taxes you owed from 2013. Be sure to be careful when going through your taxes.
- Confusing the Escrow amount on payments: Sometimes people confuse their escrow payments with what they actually paid in taxes. Be sure to use the tax bill or the statement from your mortgage company because they will tell you exactly what you paid in taxes.
- Deducting Points on a Refinance or a Purchase: It is my understanding that you're only allowed to deduct a portion of the points that you pay on a refinance each year that you took the loan out for the refinance. However, on a purchase the points that you paid are definitely tax-deductible.
- Failing to Repay the First-time home buyer credit: These credits that were offered in 2008, 2009, and 2010 each have different payback options. For 2008, you must repay 1/15th of the credit each year. For 2009 and 2010, if you stop living in the home or sell the property within 36 months, you must repay that credit in full.
- Claiming too much mortgage interest: Taxpayers can deduct up to $1 million in mortgage interest on an acquisition and also up to $100,000 on mortgage equity lines.
In the meantime, contact me with any questions or comments because I would be more than happy to assist you. You can reach me at (937) 432-2644 or email me at Denise@deniseswick.com