With tax time just around the corner, it's a great time to look back at your year and evaluate any changes in your tax situation. For anyone who purchased a home in 2010, the changes could be welcome ones!
Nothing is more valuable at tax time than a trusted accountant, and everyone's tax situation is unique, so please do not take any of the information here as direct advice - but here are a few things to consider if you purchased a home in 2010...
1. One word: Interest. This might become your favorite word during tax season! All that interest you pay on your mortgage just might pay you back in the form of a welcome tax deduction.
2. If you purchased a home in 2010, you may be able to write off your closing costs! These typically qualify as deductible expenses (even if the Seller paid them on your behalf!)
3. For Investors: Remember to track the repairs and maintenance expenses on your property, as these costs will typically qualify as deductions for investment properties. This includes HOA fees in many cases if your investment property has association dues!
4. For Non-Investors: It's still important to track your expenses... even for your primary residence. Any permanent improvement to the property could mean tax breaks down the road (when you eventually sell your property and you are determining your tax basis). Just think how happy you will be when that day comes... and use it as a reminder to keep good records NOW!
Always consult with a CPA for tax-related questions.