Paperwork Homeowners Need To Prepare For Tax Time


Taxes. No one likes them but everyone pays them. And the beginning of a new year means it’s time once again to gather documents and receipts in preparation for the April tax filing deadline! For homeowners this means being prepared with some specific documents in addition to the usual tax statements from employers, banks and stockbrokers. Keep an eye out for the items below in your mailbox (or email inbox if you opted for electronic statements) and set them aside for your tax preparer!

woman doing taxes

Form 1098 Mortgage Interest Statement

The 1098 form comes from the company that services your mortgage loan. You can find it online if you signed up for an online account or it will be mailed to you. For most homeowners, mortgage interest is tax-deductible on a primary, as well as a second home. The Form 1098 will tell you how much interest you paid during the year. Other items that may be deductible are listed on this form as well. You will see any amount paid toward points (if this was paid at the time of closing in order to bring down the interest rate), any private mortgage interest (PMI) paid and property taxes paid by the mortgage company. In addition, if you purchased or refinanced during the year, any points paid to bring down your interest rate at the time of closing would also be included on this form.

Closing Disclosure

If you purchased or refinanced a home during the year, any origination fees that you paid to your mortgage lender at closing are deductible, even if your lender paid the closing costs. You can find the exact figures on your Closing Disclosure, which you received from your escrow provider or title attorney at or just after closing. If you can’t seem to find it, contact your real estate agent or mortgage loan advisor to request it.

Property Tax Bill

You can deduct some or all of your real estate taxes if you paid them either at settlement or closing, or to a taxing authority (directly or through an escrow account) during the year. If you purchased your home during the year, any property taxes paid upfront at the time of purchase will be listed in the “Other Expenses” section of the Closing Disclosure mentioned above.

Insurance Paperwork For Property Loss Due to Casualty

If you filed any claims for property loss due to casualty (i.e. fire, flood or theft) during the previous year, you will need to provide documentation. Specify the value of the personal property before and after the casualty, as well as the amount of the insurance claim received and applied toward the loss.

Receipts for Home Improvements

Keep track of money spent on home improvements throughout the year and file them separate from home repair expenses. You cannot deduct the cost of improvements in the year that you spent the money. But, you may be able to use those expenses later on to reduce taxes in the year in which you sell your home.

Now is the time to get organized! Gathering the required paperwork in preparation for your tax filing will help ensure that you don’t miss out on any homeowner tax benefits!

By Amy Malloy