Preparing for the 2017 Tax Season 

Well, the holiday season is over and you’re returning to pre-holiday activities.  But before you get too involved in the regular day-to-day activities, start gathering documents for your 2016 tax return.  Here are some house-related documents to gather:

*If you bought or sold a house in 2016, pull out the settlement statement which shows the various costs/expenses paid by the buyer and seller.  It may contain pre-paid interest, pre-paid taxes, points, and other items which may be deductions.

*If you rented out your previous residence instead of selling it, be sure to gather a copy of the contract and all the receipts/invoices for money spent on the house since it became a rental.  There are expenses which were not deductible when you lived in the house that may be deductible now that the house is a rental (investment) property.  Examples include: homeowners insurance, home warranty insurance,  homeowner association dues, property repair expenses, and appliance repair/replacement.  If you hired a property manager, those fees may be deductible.  And don’t forget the mortgage interest and property taxes.

*If you made energy-saving improvements on your home, some of them may be tax-deductible.  Examples include: replacing heating/AC units; replacing heating/AC duct systems; adding insulation to the attic; installing energy-efficient windows; adding solar panels.  Gather all paperwork associated with these improvements so your tax preparer can determine the tax deductions.

The bottom line is that more of your homeowner expenses may be tax deductible than you realize.  So gather all applicable documents for your tax preparer’s review. 

Have a great 2017!