{"id":712,"date":"2017-02-04T01:58:50","date_gmt":"2017-02-04T01:58:50","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/easy-mistakes-denver-homeowners-make-on-their-taxes\/"},"modified":"2020-09-12T23:41:45","modified_gmt":"2020-09-12T23:41:45","slug":"easy-mistakes-denver-homeowners-make-on-their-taxes","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/easy-mistakes-denver-homeowners-make-on-their-taxes\/","title":{"rendered":"Taxes : Easy Mistakes Denver Homeowners Make on Their Taxes"},"content":{"rendered":"

Mistakes Denver Homeowners Make on Their Taxes .<\/h1>\n
\n

The month of April is coming up fast and\u00a0the good news is you still have time to find all of those real estate-related deductions. As you calculate your tax returns, be careful not to commit any of these nine home-related tax mistakes, which tax pros say are especially common and can cost you money or draw the IRS to your doorstep. <\/p>\n

\n

Mistake #1: Deducting the wrong year for property taxes<\/strong><\/p>\n

You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind \u2014 that is, you\u2019re not billed for 2013 property taxes until 2014. But that\u2019s irrelevant to the IRS. Make sure you enter on your federal forms the amount you actually paid in that tax year, no matter what the date is on your taxes bill.<\/p>\n

Mistake #2: Confusing escrow amount for actual taxes paid<\/strong><\/p>\n

If your lender escrows funds<\/a> to pay your property taxes, don\u2019t just deduct the amount escrowed. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property taxes bill. For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200 or the amount of property taxes noted on the Form 1098 that your lender sends. If you don\u2019t receive Form 1098, contact the agency that collects property tax to find out how much you paid. Your escrow may also include your homeowner\u2019s insurance<\/a>, which is not deductible.<\/p>\n

Mistake #3: Deducting points paid to refinance<\/strong><\/p>\n

You can deduct points you paid your lender to secure your mortgage<\/a> in full for the year you bought your home. However, when you refinance, you must deduct points over the life of your new loan<\/a>. For example, if you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $2,000 divided by 15 years, or $133 per year.<\/p>\n

Mistake #4: Misjudging the home office<\/a> tax deduction<\/strong><\/p>\n

This deduction is complicated and often doesn\u2019t amount to much. It also has to be recaptured if you turn a profit when you sell your home<\/a>, and can pique the IRS\u2019s interest in your return. The good news is, there\u2019s a new simplified home office deduction option if you don\u2019t want to claim actual costs. If you\u2019re eligible, you can deduct $5 per square foot up to 300 feet of office space, or up to $1,500 per year.<\/p>\n

Mistake #5: Failing to repay the first-time homebuyer tax credit<\/strong><\/p>\n

If you used the original homebuyer tax credit in 2008, you must repay 1\/15th of the credit over 15 years. If you used the tax credit in 2009 or 2010 and then within 36 months you sold your house or stopped using it as your primary residence, you also have to pay back the credit.<\/p>\n

Mistake #6: Failing to track home-related expenses<\/strong><\/p>\n

If the IRS does come calling, don\u2019t be scrambling to compile your records after the fact. File or scan and store home office and home improvement expense receipts and other home-related documents as you go so you are prepared in the event you need to show them to the IRS.<\/p>\n

Mistake #7: Forgetting to keep track of capital gains<\/strong><\/p>\n

If you sold your main home last year, don\u2019t forget to pay capital gains taxes on any profit. You can typically exclude $250,000 of any profits from taxes (or $500,000 if you\u2019re married filing jointly).<\/p>\n

So if your cost basis for your home is $100,000 (what you paid for it plus any improvements) and you sold it for $400,000, your capital gains are $300,000. If you\u2019re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.<\/p>\n

Mistake #8: Filing incorrectly for\u00a0energy<\/a> tax credits<\/strong><\/p>\n

If you made any eligible improvements in 2016, such as installing energy-efficient windows and doors, you may be able to take a 10% tax credit on the product cost only. Installation costs aren\u2019t included. (up to $500 max credit; with some systems your cap is even lower than $500). But keep in mind it\u2019s a lifetime credit. If you claimed the credit in any recent years, you\u2019re done.<\/p>\n

Installing a solar electric, solar water heater, geothermal, or small wind energy system can also make you eligible to take the Residential Energy Efficient Property Credit. To claim the deduction, you have to use the complicated Form 5695, which can mean crosschecking with half a dozen other IRS forms. Read the instructions carefully.<\/p>\n

Mistake #9: Claiming too much for the mortgage interest tax deduction<\/strong><\/p>\n

Taxpayers are allowed to deduct mortgage interest on home loan<\/a> debt up to $1 million, plus they can also deduct up to $100,000 in home equity loan debt.<\/p>\n

This article is meant to provide general information about tax laws and consequences. It should not be relied upon as tax or legal advice applicable to particular transactions or circumstances. Always, consult a tax professional for such advice.<\/p>\n

If you have any real estate<\/a> related questions, feel free to contact your local metro Denver real estate professionals,\u00a0The\u00a0Bandy Team!\u00a0Our team will guide you through all phases of\u00a0the home buying and home selling<\/a> process in Denver. Let us also show you\u00a0homes in other Denver areas including\u00a0real estate in Elizabeth,\u00a0variety of properties in Franktown\u00a0or the\u00a0lovely homes in Larkspur.<\/p>\n

We are here to guide you every step of the way!<\/p>\n

Thinking of selling your Denver home?\u00a0<\/span>
Get an accurate Denver Home Value estimate.<\/span><\/p>\n

Search all metro Denver homes and real estate for sale.<\/p>\n

Until next time,<\/p>\n

Marianne Bandy, Team Leader<\/strong><\/p>\n

The Bandy Team<\/strong><\/p>\n

\u00a0Keller Williams Park Meadows<\/strong><\/p>\n

BandyTeam – Denver Real Estate & Homes\u00a0\u00a0<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Mistakes Denver Homeowners Make on Their Taxes . The month of April is coming up fast … Taxes : Easy Mistakes Denver Homeowners Make on Their Taxes<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":713,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[4751,1403,1335,3048,62,12908,543,10,11139,3051,127,617,698,1263,1202,408,1236,1007,41,818,84,567,479,1232,1235,1237,1233,15282,1045,1262,1234],"class_list":["post-712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-owner","tag-amazing","tag-buy","tag-credit","tag-documents","tag-for-sale","tag-home","tag-home-buying-guide","tag-home-sell","tag-home-selling-process","tag-homeowner","tag-homes","tag-house","tag-insurance","tag-irs","tag-legal-advice","tag-mortgage","tag-most-trusted-realtor","tag-owners","tag-property","tag-real","tag-real-estate","tag-real-estate-for-sale","tag-realtor","tag-realtor-com","tag-realtor-com-for-sale","tag-realtor-near-me","tag-realtors-near","tag-ross","tag-sell-your-home","tag-taxes","tag-www-realtor-com"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-02-at-2.06.30-PM.jpg?fit=614%2C375&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/comments?post=712"}],"version-history":[{"count":2,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/712\/revisions"}],"predecessor-version":[{"id":90403,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/712\/revisions\/90403"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media\/713"}],"wp:attachment":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media?parent=712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/categories?post=712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/tags?post=712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}