Dear Claire: How Do I Maximize My Tax Deductions?

Unlocking Tax Savings: Essential Documents for Property Owners

If you own property, your taxes can get a little bit more complicated. There are three documents you need to effectively do your taxes. If 2020 meant buying, selling, or owning, you’re going to need these three documents.

If you’re a past client of mine, I sent you one of those documents to make it easier for you. But if you need that document, you can either look in your files or reach out to the title company that helped you close those transactions. This is called a ‘Final Settlement Statement.’ It’s going to have information from the title company, your name, the address. Now the reason why you can tell it’s a final statement is it’s got somebody’s signature at the bottom. The reason why this is useful is because it’s going to have the lender’s fees, the title fees, and any points that you paid. Those are all going to be possibly tax deductible. So you’ll want to use this document to do your taxes. If you are using TurboTax, you want three documents. I’m going to show you the next two and you’re going to want to provide these documents to your CPA or your accountant for them to maximize your tax deductions.

The second thing is your property tax statement. You’ll notice it’s yellow. Typically, anyone who has a mortgage is going to get a yellow statement, meaning it is being paid by your lender. This statement is going to show what you paid in property taxes, and those property taxes may be tax deductible. The last thing is your lender, if you have a lender on your property, they’re going to be sending you what’s called a 1098. Just double-checking — it’s going to be coming from your lender and it’s going to list out the year that you paid the interest on the property and if you paid mortgage insurance. In both of those cases, it might be tax deductible. It’s got a year on it and how much I paid in interest. Those three documents should help you maximize your tax deductions, and they should also help your accountant square everything up.

Whether you bought last year or whether you sold last year, you’re still going to have a settlement statement and if you just owned last year, you’re going to get a 1098 and you’re also going to get your property tax bill.

All three of those things are useful for your taxes this year. Of course, if you have any questions, if you decided that you’re not going to use TurboTax this year, and you want an accountant, I’m happy to provide you with names and contact information, I don’t do my taxes anymore because it’s too hard.

Of course, reach out because I’m happy to help. If you are a client of mine and you lost the paperwork I sent you, just reach out because I have all of that and I can get it for you to make this process a little bit easier. As always, I appreciate you being here with me. If you want to check out any additional content, we’ve got it over at our Paris Group Realty, LLC YouTube channel. Feel free to check it out. I would love it if you have some questions you’d like me to address in the future and would be happy to do that. I hope you all have a great week! Take care.

Have more questions or want professional advice on buying or selling a home?