Fitzgerald Realty & Auctioneers
William J. Fitzgerald
 

9 Documents That Help You Reap Real Estate Tax Breaks

Technically speaking, April 15th is tax day. But for Americans who expect a refund  including many homeowners who want to cash in on real estate-related tax perks  filing sooner holds the promise of getting that check in hand, stat. If you count yourself in that number, here’s a handy guide for 9 pieces of paper you should be sure to round up as you prepare to file, in order to reap every penny of the tax rewards you’ve earned by virtue of owning a home.
 
1. Mortgage Interest Statement  IRS Form 1098. The meatiest real estate tax deduction on the books is the one that allows you to deduct 100 percent of the mortgage interest you paid in a year  including prepaid interest or points you might have paid at close of escrow, if you bought a home last year. By now, you should have received in the mail a Form 1098 from your mortgage lender that reports how much that interest totaled up to in 2011.  If you itemize your taxes and claim a mortgage interest deduction, you must include this form with your tax form when you file. (If you haven’t received yours yet, most lenders that have online account management services also post the form digitally in your secure account on the web. Just login like you would to make your monthly payment, and look for a notice that says you can now download your 2011 Form 1098.)
 
2. Property Tax Statements.  In addition to deducting your mortgage interest, if you own a home you are eligible to deduct the property taxes you pay to your local city, county and/or state.  You are not allowed to deduct some of the other miscellaneous expenses that some localities bundle up with the taxes they collect, like waste management and local assessments for things like street lighting, libraries and sidewalk construction.  To get this deduction right, the best practice is to have your property tax statements at hand and make sure you’re only deducting what’s allowed. If you bought your home this year, it’s highly possible that you might not even have received a property tax statement yet - if that’s the case, look to #3, below.

3. Uniform Settlement Statement (HUD-1). If you bought or sold a home last year, right after closing you should have received a form called the HUD-1 Settlement Statement (hint: it’s usually on legal-sized paper and contains an accounting of credits and debits for you and your home’s buyer or seller). That form documents a number of line items which might help you out at tax time, including prepaid interest, the prorated property taxes you paid at closing, and closing costs like original fees and discount points. Some states offer tax credits for buying a foreclosure; check with your tax pro to find out if any such credits apply to you. If so, this statement might be your ticket to lower taxes. And here’s another handy hint - if you can’t find your copy, you might have gotten it on a disk - and you can always email your real estate or escrow agent for a copy, as well.

4. Moving Expense Receipts.  Moving expenses are tax deductible, if your move is closely related, both in time and in place, to the start of work at a new or changed job location and you meet the IRS’ time and distance tests. Long story short, your new home must be at least 50 miles farther from your new workplace than your old home was from your prior place of work, and you must work essentially full-time. So, if you bought or sold a home and moved in 2011, you’ll need to include receipts from expenses you incurred making the move (meals not included) in your tax prep paperwork.

5. Cancellation of Debt Statement - IRS Form 1099. Homeowners who lost a home to foreclosure, or divested of one by negotiating a short sale or deed in lieu of foreclosure with their lender might receive some version of Form 1099 from their lenders, charging them with income in the amount of the mortgage debt that has been cancelled. You see, if you borrow money from someone, then they cancel the debt, that money you originally borrowed becomes income in the eyes of the IRS - and income is, as you know, taxable.

6. Utility statements for home office.  For the average everyday homeowner who works at their employer’s place of business, utilities are not deductible (sorry!). But if there is a part of your home that is “regularly and exclusively” used for business, you might be able to claim that portion of your home as a home office, and deduct some portion of your home utilities and costs of painting and repairs, as a result.Talk with your tax provider about what expenses are allowable to be claimed under your home office deduction, and whether or not you should take it.

7. Income and Expense statements from rental properties.  Some of you have elevated the art of home ownership to a business!  If you are a landlord, your tax situation is more complicated than that of the average bear; you’ll need to have complete income and expense statements when you put your tax returns together. It might actually behoove you to consult with a tax professional to make sure you are appropriately depreciating the property over time and not taking deductions that will expose you to the risk of audits, as well as to begin cultivating a long-term tax strategy for your real estate portfolio.
 
8. Contractor receipts from energy efficient home improvements.  Under the Nonbusiness Energy Tax Credit, homeowners who have made improvements to their homes that fall within a list of energy efficient upgrades might be eligible to claim tax credits. If, during 2011, you installed energy efficient improvements such as insulation, new dual-paned windows and furnaces, you might be eligible for a tax credit of 10 percent of the cost of these upgrades, up to  $500 - only $200 of which may be used to offset the cost of windows.

9. Mortgage Credit Certificate (MCC).  If you own a home you bought in the last few years using a Mortgage Credit Certificate issued by a local housing authority, that Certificate may entitle you to a pretty hefty tax credit, based on a percentage of the mortgage interest you paid - on top of your mortgage interest deduction. MCCs apply as long as you live in the home and have a mortgage on it, but they only apply to defray taxes you actually owe - you can’t use them to get a refund.  In any event, your mortgage credit certificate, if you have one, is a must-have document as you start putting your tax prep plan in play.
 
No matter what your tax situation is, if you own a home, it absolutely cannot hurt to get some professional help and advice to make sure you maximize your deductions, while minimizing your exposure to audit. And you should always consult with a tax attorney or certified public accountant regarding your tax liabilities and implications when you buy, sell, short sell or lose a home to foreclosure.


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We had great service, we would recommend to family & friends, would work with again, very helpful and went the extra mile to help, very friendly, professional and answered all our questions, returned our calls, emails and text messages very quickly, very reliable and efficient, extremely helpful & informative, very knowledgeable.

 

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Billy was the best, helped me with everything and got it done. I'm very happy and satisfied.

 

~ Joe Young / St. Mary's Buyer

Very good experience with Fitzgerald Realty & Auctioneers.

 

~ Rick Greer/St. Marys Buyer

Billy got the job done!

 

~ Wally Yowaiski/St. Mary's Seller

Fitzgerald Realty helped us find the home we wanted to invest in and guided us through the process of buying it. Settlement was conveniently done in their office and went very smoothly. We are planning to purchase again through this company. Thanks Billy

 

~ Tom & Betty Campbell/St Mary's Buyer

I reached out to Fitzgerald to find a rental for myself and two kids. I spoke first to Office MGT. , she was very helpful. She then put me in good hand with Mark Thompson. He was helpful, showed me property, answered all my questions, punctual and any time was a good time for him. He definitely was there to help! Thank you so much and when I'm ready to do the whole buying of a house goal I will definitely be calling up Fitzgerald Realty :)

 

~ Leighann Myers / St. Marys Renter

Billy Fitzgerald was very diligent in keeping us informed on the status of the sale and the settlement for the property that we had for sale. He currently has one other listing for us and feel confident that he will be successful in finding a buyer for this property as well. We will certainly recommend Fitzgerald Realty to our family and friends.

 

~ Linda Tyler / St. Marys Seller

I want to thank you for getting my Townhouse sold. The way you took the photos, listed it and being "straight" with me on the asking price made all the difference. I also want to thank you for the excellent service I received while in your capable hands. You are a TRUE SOUTHERN MARYLAND GENTLEMAN and an OUTSTANDING Real Estate Agent. Again, Thank you Billy ....

 

~ Carolyn "Judy" Bakewell / St. Marys Seller

We had great service! We would recommend Billy to family & friends. He was very helpful and went the extra mile to help and would work with again. He was very professional, friendly and answered all our questions. He would return our calls, emails & text messages very quickly. He was extremely helpful, reliable & efficient, also very informative & knowledgeable. I give him 5 stars!

 

~ John Taylor / St. Marys Seller

Good professional, courtesies service. The agent went to bat for me on every opportunity. After the deal was struck Billy aka (COL) did all that was expected and moved rapidly to wrap to entire transaction up. My family appreciated working with Billy and the Fitzgerald Real Estate family and we would recommend their services to others.

 

~ Mark Steedley / St. Marys Buyer

Billy went far beyond what anyone else before him did. Billy is a great person and will be the only one I ever recommend!

 

~ Craig Tiburzi / St. Marys Buyer

Amazingly when I saw a Fitzgerald Sign in the front of property I had to have, I reached out to Mr. Billy Fitzgerald and in less than a month the necessary people were contacted to assist in a short wait to closing. I would gladly recommend The Fitzgerald Realty & Auctioneers to family and friends.

 

~ Brian Small / St. Marys Buyer

My husband and I were very satisfied with the expertise and helpfulness of Mr. Fitzgerald. 4 stars

 

~ Carol Pingleton / St. Marys Seller

I wanted to commend Fitzgerald Realty & Auctioneers for the great job that they have done, for the many years of selling Real Estate for me and my clients. I have always found you very responsive. “A successful transaction is never an accident it is the result of personal service and a sincere effort”. Keep up the good work. Sincerely, Rudolf A. Carrico Jr. Attorney at Law

 

~ Rudolf A. Carrico, Jr. / Charles County Seller

Awesome ! We are so happy with Billy & Fitzgerald Realty !

 

~ Misty Peed / St. Marys Buyer

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