You've got your W-2 forms, and it’s time to go through your finances to file taxes. This usually isn't a fun task, but there’s good news if you bought a home, moved for a job or paid a mortgage or property taxes last year!
Check out the list below for the top 6 commonly overlooked deductions for homeowners:
- Moving expenses. To qualify to deduct moving expenses, you must meet a three-part test: closely related to the start of work, distance and time. First, you must have spent money on a move within one year of starting work in a new location. Next, your new work location must be at least 50 miles farther away from your old home than your old job was. And finally, you must work full-time for at least 39 weeks during your first year in that new job.
- Mortgage interest. Like most homeowners, a good chunk of your mortgage payment likely goes toward interest on your loan. The good news is all of this interest is deductible in a lot of cases! There are limits on this rule if you refinanced, have a loan for more than $1 million or own multiple properties.
- Property taxes. You can include all property taxes you paid, according to your 1098. If you bought your home in 2014, you can also count taxes you reimbursed the seller for—that amount will be on your settlement sheet.
- Home office. If you work from home, you may be able to claim a deduction for your home office. In general, this deduction is based on how much you use a room in your home for business, like an extra bedroom or garage. There are some limitations based on how often you use that room, and how much of your business is conducted there.
- Points. These are prepaid interest, and are used to obtain a mortgage. Like mortgage interest, there are limits on how large your mortgage is, and how the points were paid when you bought your home.
- Home improvements for medical care. For people with disabilities, home improvements that are required by a doctor may be deductible. In a rented house (where other costs were not reduced by a landlord), these costs may be listed as medical expenses.
As always, your individual situation is just that- different from everyone else’s, and may not meet each requirement. You should always check with an accountant or the IRS directly to be sure you qualify for these deductions. Happy filing!