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Tax Tips For The Homeowner: Energy Efficient Upgrades (Part 5)

Published on March 17, 2015 by Sandra Rubinstein

If you invested in upgrading your home with energy efficient appliances or products you may qualify for the “Residential Energy Tax Credit”. These tax credits are especially attractive as they allow you to itemize & deduct dollar to dollar, up to 10% of the amount you spent, on certain approved energy-efficient upgrades. This deduction does carry with it a lifetime cap of $500.00 (possibly less on some). So, please pay close attention if you have claimed any qualifying energy-efficiency deductions in years past on your return.

Here is a partial list of upgrades that may qualify.

1. Heating, Ventilation, and Air Conditioners

2. Insulation

3. Roofs

4. Water Heaters

5. Windows, Doors & Skylights

6. Stoves that use Bio-Mass fuel

***Please note: If a product has earned the Energy Star designation that does NOT automatically qualify it for the deduction. Not all ENERGY STAR certified products qualify for a tax credit.

Please check with a Licensed Professional or source for a complete list.

Tax Tips For The Homeowner: Prepaid Interest Deductions {Points} (Part 4)

Published on March 16, 2015 by Sandra Rubinstein

Home Mortgage Interest & Points (Prepaid Interest Deductions are reported on Schedule A of IRS Form 1040. Your Lender will send you Form # 1098 that will list the points you paid on the close of your loan or refinance. This amount also appears on the HUD-1 Settlement Sheet you received on the close or your loan or refinance.

1. Prepaid interest (points) are generally 100% deductible in the year that they were paid along with the interest you are charged throughout the year.

2. If you are opting to refinance (interest rates are at a all time low) & use the escrow in your home towards home improvements-any points paid are deductible in that same year.
a. If you are refinancing to get a better rate or a shorter term of the loan, or to use the monies for something other than home improvements (such as College Tuition) the points paid will be prorated over the life of the loan

Tax Tips For The Homeowner: Property Tax Deductions (Part 3)

Published on March 14, 2015 by Sandra Rubinstein

1. You can deduct your Property Taxes for the year you are filing on the IRS Itemized Deduction “Schedule A” form.

2. If you purchased a home this year (2014) check your HUD-1 (the financial Seller & Buyer closing statement document) to see if you were charged when you closed on the purchase of your home. This charge may be used as a deduction on the IRS Schedule A Itemized Deduction Form.

3. If your Property Taxes are escrowed in your Mortgage payments the Real Estate Property Taxes you paid may be verified on your Annual Escrow Statement and then deducted on Schedule A.

Tax Tips For The Homeowner: PMI & FHA Mortgage Insurance Premiums (Part 2)

Published on March 11, 2015 by Sandra Rubinstein

Welcome to Part 2.

What is PMI? If you have a mortgage that has NOT been secured by at least a 20% down payment of the appraised value or sale price, your lender will require that the mortgage to be insured against the possibility of the default of the payments on the loan.

So how does this charge translate on your tax return?

1. On loans taken out from 2007 or later, you may deduct this monthly charge, that is part of your monthly payment, on Schedule A of your itemized return.

***Please note, unless Congress renews the deduction, 2014 will be the last year that this tax deduction will be eligible (Please check with your Tax Advisor for the status of the deduction)

a. If your adjusted gross income is more than $100,000.00 your deduction is reduced by 10% on each $1000.00 ($500.00 for individuals that are married but filing separately) example: if you are making $110,000.00 or more the deduction may not be claimed.

2. There are government insurance fees for loans funded by the FHA, VA & the Rural Housing Services agencies. Some of the fees may be paid in full at time of closing. As their deductions may be complicated and dependent on various contingencies & vary form agency to agency, it is best to consult a tax advisor or other professional resource.

Please check back for Part 3: Prepaid Interest Deduction

Tax Tips For The Homeowner {Part One}

Published on March 10, 2015 by Sandra Rubinstein

Here the most up to date information on your homeowners mortgage interest deductions for you to take advantage of that can be documented on your “Schedule A” of your Federal Tax Returns. Please do not forget a “home” {that is secured by your mortgage} may be a house, a trailer, or a boat-as long as you can sleep in it, cook in it & it has a toilet.

1. Interest on a mortgage that is charged ($1.0m or $500.0k if married filing separately)is deductible if the loan is used to buy, build, or improve a residence. A second mortgage, including a home equity loan or line of credit, to improve your current residence or to purchase a second home, that will be included towards the $1.0m cap.

2. If loans secured by your residence, including sending a child to college, you may still deduct the interest on these secured loans up to $100.0k ($50.0k if married filing separately) because your home (your collateral) is securing the loan.

Please check back soon: My next “Tax Tip For The Homeowner’ will cover ‘Private Mortgage Insurance (PMI) & Federal Housing Association (FHA) Mortgage Insurance Premiums

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