Tax time is upon us, and that can mean lots of stress for new and old homeowners alike. Even if you’ve been in your home for years, you might be making some common mistakes that could impact your taxes.
Here are some things to look out for as you prepare your 2017 taxes:
Home Improvement Expenses
Did you know that you can deduct home improvement expenses on your taxes? You can, as long as you itemize deductions and have records of what you did and when you did it.
Store receipts and other documents in a dedicated place throughout the year so you don’t have to scramble to find everything when April 15th rolls around. If you haven’t been collecting receipts but want to utilize the deductions, make sure to start keeping track of things now so you’re ready for next year’s tax season.
Most homeowners know that they can deduct their property taxes on their returns, but many report the wrong information when doing so because property taxes are paid a year behind your taxes in some places.
Do you fall into this category? If you’re not sure, your local tax office should be able to tell you pretty quickly. Once you have the answer, double or triple check your return to make sure that you have the correct information before clicking “submit” to file.
Home Office Deduction
As work schedules become more flexible, more and more people are now able to take advantage of the home office tax deduction. Again, this is a great benefit as long as it’s done correctly.
You can claim up to 300 square feet of your home office at $5 per square foot, for a maximum deduction of $1,500. However, this only applies to an officially sanctioned home office for your own business or at the discretion of your employer. Taking work home voluntarily on nights and weekends, while important to your company, will not get you any extra money back from Uncle Sam.