April isn’t that far away. But if you’re like most of us, you’ll still put off doing your taxes till you have to rush through it all in one anxiety-filled sprint.
But that’s okay. You can still get the most out of your home at tax time with these 5 last-minute tax tips for homeowners in MN.
5 Last Minute Tax Tips For Homeowners In MN
1. Pick Up Form 1098
Form 1098, the Mortgage Interest Statement, can be likened to a W-2 for your home. It contains, all in one easy form, all the major deductions and tax breaks for homeowners, the most important of which are mortgage interest and property taxes.
For most people, the biggest real estate tax deduction is interest on their home loan. In fact, if you’re single, you can deduct the full interest up to $500,000, and if you’re married filing jointly, the limit is $1 million. The second-biggest deduction for most homeowners is that for property taxes, the average household property tax being $2,127.
Now, the beauty of Form 1098 is that you can take care of these two big ones easily and quickly in one place. And if you’re really rushed and trying to beat the filing deadline, you might just take these two major deductions and be done with it – instead of trying to do more and being late and facing penalties.
2. Don’t Forget Local Tax Breaks
If you do have just a little more time, there are some often-overlooked tax breaks you might consider. Although it’s not widely known, homeowners can deduct local and state taxes on their federal tax return. In addition, lower-income homeowners may be eligible for special property tax benefits from local municipalities or state governments.
3. Don’t Forget Damage-Loss Deductions
Last minute tax tips for homeowners in MN would have to include a warning not to forget deductions for damage loss. In many cases, property damage – losses from fire, weather, and even theft – can be tax deductible.
The IRS will grant a tax break for any property or casualty loss that amounts to more than 10% of your gross income and not reimbursed by insurance. But you do have to document the damages, proving both value and circumstances of the loss. The loss or damage is bad enough, so turn it to your advantage with a Form 4684.
4. File an Extension
If worse comes to worst and you see that you’ll miss the deadline, you can always file an extension. Contrary to what you may have heard, filing an extension is fairly simple, carries no penalties, and gives you an extra six months.
You can file an extension online or by filling out the form and mailing it. You just need to indicate on the form the estimated amount of tax you’ll owe.
And if you think you won’t be able to pay your tax bill, it’s better to file an extension, even with estimated, inexact numbers, than not filing at all. Keep in mind that the IRS has payment plans for people who can’t pay all they owe all at once. If you don’t file at all, you open yourself to penalties and the dreaded audit.
5. Get Help
Finally, in some cases, the best of the last minute tax tips for homeowners in MN might be to get some expert help. Whether you hire a qualified tax preparer or seek the advice of a real estate professional, experts in this area can help you find ways to save money that you probably wouldn’t discover on your own.