{"id":525,"date":"2014-12-17T14:50:54","date_gmt":"2014-12-17T14:50:54","guid":{"rendered":"http:\/\/www.mvragency.com\/blog\/?p=525"},"modified":"2014-12-17T14:50:54","modified_gmt":"2014-12-17T14:50:54","slug":"homeowner-tax-tips-consider-these-smart-moves-before-2014-ends","status":"publish","type":"post","link":"https:\/\/www.mvragency.com\/blog\/homeowner-tax-tips-consider-these-smart-moves-before-2014-ends\/","title":{"rendered":"Homeowner Tax Tips: Consider These Smart Moves Before 2014 Ends"},"content":{"rendered":"

With just over two weeks remaining in the year and the holiday rush upon us, income taxes may be the last thing on your mind. But property owners would be smart to check their to-do lists twice to make sure they get the maximum homeowner tax benefit from the IRS in 2015.<\/p>\n

The good news is that 2014 looks an awful lot like 2013 in terms of tax policies affecting homeowners\u2014nothing has really changed. Forbes spoke with two CPA financial planners, Jerry Love of Abilene, Tex., and Michael Schulman of Central Valley, N.Y., who offered the following suggestions homeowners might want to consider as they close out the year.<\/p>\n

1.\u00a0<\/b>Pay your property taxes early<\/strong>. In states where property taxes are due in multiple chunks, it may make sense to pre-pay next year\u2019s first installment before this year ends. This is especially the case for people expecting their incomes to go down in 2015. Just be sure that your mortgage company allows for pre-payments. \u201cIf [property tax payments] are being done through your escrow account, you may not have any control over that at all,\u201d notes Love.<\/p>\n

2. Accelerate mortgage payments.<\/strong> Following the same logic, it may make sense to push January\u2019s mortgage payment into December so that you can accelerate that interest deduction in the current year. Just writing a check on Dec. 29 isn\u2019t a guarantee that\u00a0the mortgage company will cash\u2014or count\u2014for in 2014. \u201cAbsolutely communicate with the mortgage company on when the mortgage company needs to receive it to count it for the current year,\u201d Love notes. \u201cBecause if it\u2019s not on that form 1098, it\u2019s going to be difficult to get the deduction.\u201d<\/p>\n

3. Consider bunching deductions. <\/strong>Now is the time to plan ahead in terms of itemizing versus standard deduction, for both this year and next, notes Love. In some cases, it may make sense to switch off between these two strategies. For example, consider a married couple, who for 2014 have a standard deduction\u00a0of\u00a0$12,400. Let\u2019s assume that in 2013 they had itemized deductions worth $7,500, meaning it would make more sense for them to take the 2013 standard deduction (then $12,200). \u201cBut let\u2019s say that $5,000 of that $7,500 is their property tax,\u201d says\u00a0Love. He would have advised such a couple to take the standard deduction for 2013, and then to pay their 2013 year-end property taxes in January 2014 and their 2014 taxes in December, in order to create a total \u201cproperty tax for 2014 of $10,000.\u201d Add in $3,000 in about charitable donations and suddenly this hypothetical couple\u00a0would want to itemize. Again, this kind of bunching requires planning ahead. \u201cIf someone were starting that strategy, they would be looking at their property tax and saying I need to not <\/em>pay my property tax in December, I need to pay in January so I could have two in 2015,\u201d Love says.<\/p>\n

4. Watch the tax extender bill. <\/strong>In early December\u00a0the House\u00a0passed the \u201cTax Increase Prevention Act of 2014,\u201d which extends energy credits for windows, as well as\u00a0energy-efficient building envelope components including insulation, exterior windows (or skylights), exterior doors and some roofing materials, among other items. The measure has not yet made it through the Senate.\u00a0Just make sure all this has shaken out\u00a0before taking advantage of the expected extensions.<\/p>\n

Other homeownership-related aspects of tax time don\u2019t necessarily need action steps now, but may be a bit confusing. Here are some items you can\u2019t do anything about, necessarily, but want to understand before you visit the taxman or file on your own.<\/p>\n

    \n
  1. Private mortgage insurance<\/strong>. PMI is deductible and should show up on your 1098. Homeowner\u2019s insurance is not deductible. Love says he\u2019s seen many a client confused on this point.<\/li>\n
  2. Limit on mortgage interest deductibility<\/strong>. \u00a0Mortgage interest is always deductible\u2014almost. There are limits to how much mortgage interest you can deduct, based on the amount of the mortgage: \u201cIts $1 million on the first mortgage and $100,000 on the second mortgage,\u201d says Schulman. \u201cSo if you have a house that cost $5 million with a $4 million mortgage, you won\u2019t be able to deduct the entire mortgage interest you pay on that.\u201d (Limits are for two people who jointly own the property.) Be very careful, Schuman warns. \u201cThe IRS has been actively going after this.\u201d<\/li>\n
  3. Vacation\/second homes. <\/strong>Mortgage interest payments and property taxes are deductible on second homes. So, too, are\u00a0other\u00a0business expenses on rental properties. \u201cYou can\u2019t deduct your own homeowner\u2019s insurance [on a primary residence], but you can deduct it on a rental property,\u201d says Schulman. The same is true for costs for snowblowing, gardening, or maintenance charges for a co-op.<\/li>\n
  4. Home equity loans.<\/strong>\u00a0These instruments generate mortgage interest that you can claim on your taxes. \u201cIf you have a home equity loan that was secured by your home\u2014in other words, your home is the collateral\u2014the bank should be issuing a 1098 for the interest that you pay, and that\u2019s deductible,\u201d says Love.<\/li>\n
  5. Casualty losses. <\/strong>If a big storm damaged your home, you may qualify to claim casualty losses on your taxes. This is based on the net loss after insurance has been paid and must be more than your adjusted gross income (AGI). Let\u2019s hope you don\u2019t qualify.<\/li>\n
  6. Home office deduction<\/strong>. The simplified standard is now $5 per square foot up to a maximum of 300 square feet.<\/li>\n
  7. Exclusions on gains from sales<\/strong>: This rule has been around for a decade but is still worth noting: home sales in 2014 qualify for an exclusion on the net sales gain (selling price minus purchase price, plus any improvements) of up to $250,000 for an individual, $500,000 for a couple. However, this only applies to homes used as a primary residence for two out of five years. If you\u2019ve moved out and then moved back in, you must live in the home for five years before you can take this exclusion.<\/li>\n<\/ol>\n
    source: Forbes<\/h6>\n","protected":false},"excerpt":{"rendered":"

    With just over two weeks remaining in the year and the holiday rush upon us, income taxes may be the last thing on your mind. But property owners would be smart to check their to-do lists twice to make sure they get the maximum homeowner tax benefit from the IRS in 2015. The good news is that 2014 looks an<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6],"tags":[235],"class_list":["post-525","post","type-post","status-publish","format-standard","hentry","category-homeownersinsurance","tag-tax-tips"],"_links":{"self":[{"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/posts\/525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/comments?post=525"}],"version-history":[{"count":1,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/posts\/525\/revisions"}],"predecessor-version":[{"id":526,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/posts\/525\/revisions\/526"}],"wp:attachment":[{"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/media?parent=525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/categories?post=525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mvragency.com\/blog\/wp-json\/wp\/v2\/tags?post=525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}