As the year wraps up, here are some tax-time prep tips for homeowners to make sure you're ready when tax season rolls around:
1. Gather Mortgage Interest Statements: Your lender will send you a Form 1098, which outlines the mortgage interest you’ve paid throughout the year. This is a key deduction for homeowners.
2. Property Taxes: Keep track of any property taxes you’ve paid in 2024, as they may be deductible. If you’ve prepaid any taxes for the following year, note that as well.
3. Home Improvement Deductions: If you've made energy-efficient upgrades (like solar panels or new windows), you may be eligible for tax credits. Be sure to keep receipts and any documentation related to these upgrades.
4. Keep Track of Home Office Expenses: If you’ve worked from home, you might be eligible for home office deductions. Make sure to track your workspace's square footage and any expenses related to it.
5. Refinance or Home Equity Loan: If you’ve refinanced your mortgage or taken out a home equity loan, make sure to gather all the paperwork. You may be able to deduct certain fees and interest.
6. Review Capital Gains Exemption: If you sold your home in 2024, be sure to check whether you qualify for the capital gains exclusion. You can exclude up to $250,000 of gain ($500,000 for married couples) if you lived in the home for at least two out of the last five years.
7. Consult a Tax Professional: Tax laws change, so it’s always a good idea to consult a tax professional to make sure you’re taking full advantage of available deductions and credits.
A little preparation now can save you a lot of time (and money!) when tax season comes around. Happy prepping!
