Check out these four tricks used to get you to spend more (without you knowing it).
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We recently came across a tax statistic that blew us away. In 2002 (the only year the study was conducted), 61% of homeowners did not claim their homeowner's tax deductions on their income taxes.
Let's make that really clear. It doesn't mean that 61% of homeowners didn't pay enough in mortgage interest and property taxes to take the deductions. It means that 61% of homeowners who were eligible to take the deductions and would have saved on their income taxes took the standard deduction (and paid a higher tax bill) instead.
That's right! Those folks said "No thanks" when Uncle Sam tried to give them back some of their own money—on a silver platter!
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A Few Minutes Could Save Hundreds
Lots of taxpayers take the easy way and choose to take the standard deduction on their federal income taxes, which the IRS has set at $11,900 for this tax year for married couples filing jointly. That's fine if your individual deductions don't exceed that amount.
If you have a mortgage, though, it's worth checking to see if your homeowner's tax breaks exceed or at least put you within reach of the standard deduction. If they do, then you can add on tax breaks for other expenses such as charitable donations and local sales or income tax that are only available if you itemize.
For example, a married couple filing jointly makes $75,000 and paid:
$8,700 in mortgage interest
$1,400 in property taxes
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That's not enough yet to make itemizing worthwhile, but once you add their $3,000 in charitable contributions and $1,750 in local sales tax, the total comes to $14,850—exceeding the standard deduction by $3,150 and saving the couple $740 on their taxes!
Ask a Pro About Past and Future Savings
Don't miss any more tax savings by automatically taking the standard deduction. Consult a tax pro to see how much you could save by taking advantage of your homeowner's tax breaks.
And, if you suspect you've overpaid your taxes in the past, a tax pro can review your past returns and help you file an amended return to reclaim your cash and help you make sure you don't overpay again.
One of Dave's tax Endorsed Local Providers (ELPs) will take the time to explain your taxes so you'll understand how to save on taxes in the future. Get in touch with your ELP today!
And, for expert help to buy or sell a home, work with one of Dave's real estate ELPs. Your ELP will be able to advise you on your local market and help you buy or sell your home at the best price.