If you purchased or sold a home, or refinanced your home this past year, dig out a copy of your final settlement statement and give this document to your accountant or the person who helps with your taxes. Certain items on your closing statement might be tax deductible. Generally if you itemize your taxes, you can usually deduct mortgage interest which is secured by your primary home or second home and mortgages used to build or improve your primary or second home (commonly known as home equity lines of credit). In addition, check with your tax adviser to see if you can deduct:

  • Pre-paid interest and points
  • Late payment charges on mortgage payments
  • Mortgage pre-payment penalties
  • Moving expenses – if you moved because of a change in your employer’s location or because you started a new job
  • Repairs to rental property
  • Capital improvements – major home improvements done in order to prepare your home for sale
  • Capital gains – If you sold your primary residence last year, you can exempt the first $250,000 of profit or $500,000 for married taxpayers filing jointly

My best wishes to you and your family in the upcoming year. And, if you’re lucky enough to need another tax write-off, I would be happy to help you find the perfect investment property.