Often Overlooked Tax Tips for Homeowners

April 09, 2010

It’s tax month. Oh, joy. Well, joy if you will ultimately get money back from the government.

We, at Chicagoland Real Estate Forum, would like you to get back as much as possible, so here are a few tax breaks for homeowners that you might not know about that could save you some cash.

Green Nets Green: The new Recovery Act’s Energy Efficiency and Renewable Energy Incentives rewards “green” upgrades to your home. That includes improvements, such as insulation, roofs, windows and doors, as well as the purchase of energy-efficient products like furnaces and water heaters. The tax credit equals 30% of the cost of the project up to $1,500. New construction is not eligible for the deduction, and most of the credits are good only for 2009 and 2010. Products based on geothermal or solar technology have no cap and the credits are good through 2016. Check out the guidelines to see what qualifies, and use IRS Tax Form 5695 to file.

Mortgage Points: Have you taken out a mortgage this past year? With points? If you did, it will be listed on the 1098 statement from your lender. Lenders use points to make money; borrowers pay points to save it by getting lower mortgage rates. Loan points are fully deductible the year they are purchased when they meet the requirements. In addition, homeowners who refinanced their mortgage or took out a home equity line-of-credit may also be eligible for a tax break if money was used to improve your home. You can deduct the points even if that loan was not for home-related improvements, but the credit must be distributed throughout the term of the loan.

Moving Expenses: Have you had a job-related move this past year? The IRS provides a tax deduction for relocation costs as long as the move was for work and far enough away. The new job must be at least 50 miles further from your last home and office. Deductions include moving, some storage and insurance fees, utility connection and disconnection charges, shipping of your car and even travel arrangements for your pets. Use the long Form 1040 to claim moving costs and check out the guidelines to make sure you qualify.

For more information on these and other available deductions, check out the IRS web site.

Can’t use any of these deductions for 2009? Well, luckily there’s another tax season next year, so keep these in mind and save your receipts.

Now, go do your taxes. It’s almost April 15!

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