Market Update April 21, 2021

LAST MINUTE TAX TIPS FOR HOMEOWNERS

This year federal incomes taxes are due on May 17th. While some of us might be guilty of procrastinating (after all we still have almost a whole month left!). Here is a list of tips that might save you some money:

Tip 1 – rather than taking the standard deduction, look at your 1098 for your two biggest tax breaks: interest on your mortgage and property taxes. According to the IRS, “Single people can deduct the full interest up to $500,000; for married couples filing jointly, the limit is $1 million if you purchased a house before Dec. 15, 2017. If you bought a home after that date, you will be allowed to deduct the interest on no more than $750,000” Mortgage interest paid is usually a very significant deduction… As for property taxes, you can deduct up to $10,000.

Tip 2 – If you plan on filing an extension until October 15, the IRS still requires you to pay your estimated tax bill by May 17 (unless you want to pay interest on what you owe)

Tip 3 – If you make less than $69,000 per year, the IRS will provide you with free tax prep software. However, since the cost of having your taxes prepared for you is only on average $22, it might be worth having an expert look through your documents and potentially spot an extra deduction or two.