Post # 1
My FH and I bougt a home in Septemebr of last year.
As tax season starts, we are wondering what we can deduct and claim. I know we can claim the interest we paid on the house (or at least one of us can claim it). But what about any home improvements we did, like we had Ever Dry come in and fix our basement for a little less than $20,000, can we claim that? What about small repairs we did?
Any advice would be greatly appreciated. Thanks bees!
Post # 3
- Wedding: November 2013 - St. Augustine Beach, FL
Once you own a home it’s generally worth using a tax service like HR Block or a local CPA firm to make sure you get all of your deductions. I would rec going this route to avoid potential issues down the road with an audit should you accidentally claim more than you can.
Post # 4
Improvements are generally not tax-deductable unless you have certain energy-efficient improvements such as solar panels, new doors/windows, etc. The energy efficient items may qualify for state, local or federal tax credits; google can help get you started.
Keep track of these other improvements, though, because when you sell your home at some point in the future, these expenses may help lower the amount of capital gains tax you have to pay on any increase in property value. Cleaning probably wouldn’t count here, but if you had an unfinished basement and had it fully finished, that could help bring your capital gains down. Generally, major improvements such as renovations, additions, and replacing major infrastructure (plumbing, electric) would factor in but minor repairs or upgrades, or upgrades to items with a shorter expected lifespan such as carpeting would not factor in.
Post # 5
It may or may not be worth itemizing, especially if you didn’t buy until September. You have to itemize to get the deductions for a home purchase. I suspect that unless you bought a very very expensive house, you won’t have paid enough in interest and closing costs to itemize. You would only have had what, 2-3 payments under your belt by the end of the year? On our $500,000 townhouse, that’s only $3k in taxes. And we paid about $7k in closing. Not enough for us to itemize,
Post # 6
@fishbone: +1 (from my experience as a tax preparer in a CPA firm for the last three years).
Also, you can deduct any property tax that you paid – check your HUD-1.
You both can’t claim it as you’ve stated. Also, things like interest expense and proprety taxes are only deductible on your Schedule A if you itemize – if you take the standard deduction (I can’t remember what it is), you might not even have to worry about it. Chances are, you won’t have THAT much interest yet for three months of mortgage payments.
Post # 7
I would say use a CPA. They know about all deductions, etc.
Post # 8
Yea i’m trying to talk FH into using a tax service but he tells me to just google it and find out. Yeah, okay cause you know i totally know tax laws and have my accounting degree I love the man but sometimes his logic is off the wall. But I’ll be pushing for a tax professional this year. Haha THanks bees again
Post # 9
We started using an accountant the year we bought our house as well. We each paid $125 and it was money well spent!
Post # 10
@jatelynn: I would recommend a CPA over H&R block or anything like that. A lot of the times, it’s even cheaper, but it won’t be quick (at least a few weeks). Either ask for recommendations if you don’t know any or even look one up in google or the phone book.