(Originally Published March 10th, 2011)
With tax season looming, you really should be considering the tax benefits and impacts of home ownership. If you’re utilizing a CPA, make sure they’re up to speed on your real estate status, as it can typically save you a lot of money at tax time. If you handle taxes on your own, just make sure you don’t miss the following tax tips for Fort Collins Home Owners.
1. Refinancing and Reducing Property Taxes
If you’ve refinanced over the past year, you’ve most likely saved a good chunk of money, just on monthly payments alone. The good news is, when you refinance you may be able to deduct some of those closing costs (see #2) to increase your savings further. If you’ve gotten your home re-assessed, you may also be saving a little money on property taxes as well. Keep in mind, however; that a good portion of property taxes are deductible. So although you’ve been able to re-assess to save you money, your deductions will also reduce. Talk to a tax professional to understand your impact.
2. Deductible Closing Costs
If you, like many, were able to buy a home in the past year, taking advantage of low interest rates, a good portion of your closing costs will be deductible. Discount points or any origination fees that were paid to your lender at closing are deductible. Even better, if the seller paid your closing costs, you still can take a deduction! To find your deductible costs, simply pull out your HUD-1 settlement statement that you received at closing and apply your deductions.
3. Itemizing Deductions Vs. Standard Deductions
Strangely enough, there are about 40% of homeowners in Fort Collins that fail to itemize their return, and get no tax advantages for their largest asset. Taking the standard deduction might be the easiest way to get your taxes done, but you may be missing out on tons of deductions. Your CPA or tax program will be able to help you understand which route to take, but typically Fort Collins home owners benefit from taking the itemized deduction and reap the benefits of an awesome tax advantage.
As a disclaimer, we are not a tax professionals, nor do we claim to have all the answers, tips, and strategies. If you have a difficult tax situation, please consult a CPA or Tax Attorney. They will be well worth their fee in the amount of money they can find for you.
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