Owning a home provides many financial benefits, such as building equity and not having to pay rent. Additionally, certain tax benefits and deductions are available to homeowners. With tax season almost in full swing, now is the time for homeowners to start preparing the documents they will need.
Aside from traditional income forms such as the W-2 and 1099, documents that homeowners should have on hand for tax preparation include:
- IRS Form 1098 – Provided by your mortgage lender, Form 1098 shows payments on interest, points and private mortgage insurance. This form often includes the amount of real estate taxes paid.
- IRS Form 1040 – this is the actual tax return form you will file
- Schedule A (Form 1040) – this is the form you use to itemize deductions like interest and taxes.
- Tax Bill – if your form 1098 doesn’t show the property taxes paid, you’ll need your tax bill
- Home Improvement Receipts – If you made improvements to your home to increase its energy efficiency, those improvements may be tax-deductible. Receipts and information about the purchases will be helpful in determining their deductibility status.
- Loan Closing Disclosure – This will show information about any points you may have paid to get your loan that might be deductible along and also show property taxes paid upfront.
- Mortgage Credit Certificate – If your lender submitted your loan for a Mortgage Credit Certificate (MCC) this document will be needed when you file your federal taxes. In NH the MMC is a document provided by NH Housing that converts a portion of the paid mortgage interest into a tax credit. This is also known as the Homebuyer tax credit.
- IRS Form 8396 – this is the form you need to file if you are getting a homebuyer tax credit and have an MCC (Mortgage Credit Certificate)
Click on the image above to access the IRS publication
I would love to connect you with one of my trusted business partners who are tax preparers and/or accountants. They can explain the tax benefits and implications available to you.
Also, if you are considering purchasing a home or refinancing, call me today to discuss your options! Tax refunds are a great source of down payment!