Buying A House And Saving on Taxes

When it’s time for you to buy a house, make sure that you aren’t just blindly following any advice. Make sure that you take your time to fully understand that you are getting into. Your finances are going to either take a major hit, or you’re going to be able to gain leverage when purchasing your dream home. The key to moving forward within this world is simple, you need to have patience, and you’ll need to also make sure that you’re in line with the tax breaks that help you, not hurt you. Without fully understanding some of the crucial tips for purchasing a home and possibly saving money on your taxes as a result, things can get really difficult.

Changing Tax Deductions

One thing that H&R Block professionals recommend in regards to purchasing a home and getting the best opportunity at the same time is to look into claiming itemized deductions. These will help you pinpoint a lion’s share of deductions that standard solutions won’t allow you to get. If you bought a house in the past year, this will be amazing.

Cover of "Buying a House: An Easy, Smart ...
Cover via Amazon

Go Beyond The Basics

When doing taxes, you need to focus on looking at beyond just the basics. You’ll find that a great deal can be dropped off your overall taxes, including deductions like interest, points, real estate taxes, and so much more. When it comes time to fill out paperwork, take a step back and allow a professional to look at your files. You may find out that there are some hidden gems in terms of deducting overall tax liability and more.

The Record Keeping Process

One of the most crucial tips that you can take with you today, especially when it comes to saving money on your taxes every year is to make sure that you have a clear picture of your finances, and anything that pertains to the purchase, sale, and upkeep of your home. It is a wise move to invest in a good filing cabinet and keep paperwork for upwards of 5 years. You’ll find that if you’re meticulous with this, you’ll make great gains moving forward with the world of purchasing a home, getting a mortgage, and saving money on your tax return.

One last thing you should remember is simple, hire a good tax preparation professional. Seek out qualified H&R Block providers and you’ll find that your next preparation could end up giving you a serious kickback in return.

Commonly Overlooked Tax Deductions to Watch Out For

Tax season is upon us, and with it comes a lot of work and a lot of stress. It is everyone’s goal to come out of a tax filing with some extra money in pocket – or at least to have to come up with as little out of pocket as possible. Therefore, it is extremely important not to miss any and every possible deduction you can take whenever you are preparing your tax forms. If you are not an expert in tax code, then it is likely there are some deductions you could miss if you are not conscious of them. Here are some commonly overlooked tax deductions to watch out for:

State sales tax. It is hard to miss this deduction, but many people skip over it in favor of the state income tax deduction, which makes sense, considering state income taxes are often the bigger tax burden. However, you might want to reconsider if you have made any large purchases over the past year, as sales tax on automobiles and homebuilding supplies can really add up. Many people overlook the sales taxes they paid on these major items, and therefore fail to even make the comparison when itemizing their deductions.

Charitable donations. It is easy to forget the small contributions you make toward charities over the year, but it pays to keep records of them because they really can add up. In addition to that furniture you dropped off at the Goodwill, you can also write off payments to your child’s PTA fundraiser, any supplies involved in making those cakes for the bake sale, and any mileage your car incurred while driving to and from charitable events, among other things.

Caregiver expenses. If you are the responsible caregiver for you parent, then you can write off the costs associated with providing that care, from nursing home bills to in-home health aides.

Mortgage-related costs. You can write off any points you paid to get your new mortgage loan or refinance your existing mortgage loan, as well as any interest you paid on your mortgage over the course of the year.

Job-related expenses. Costs related with finding a job, maintaining a job, and moving for a job can be written off. Common expenses that often get overlooked include transportation to and from interviews and training, employment agency fees, moving company fees, and costs associated with marketing yourself for a job (business cards, resumes, websites, etc.).

It may be possible for you to fare better on your taxes this year if you dig in this list of commonly overlooked deductions. Tax time requires some serious time and thought, but if you put those two things in, you can increase your chances of getting more (or giving less) in your annual dealings with the IRS.

About the Author: Maryalice Dunwoody is a tax advisor who enjoys helping family members and friends maximize their returns. When she’s not working, she relaxes with the oolong tea she loves most and searches goldenmoontea.com for new blends and gifts for others.