From Awards to Write-Offs: Success Celebration & Essential Tax Tips for Homeowners!
How fitting in this month for "love," I am filled with immense gratitude and want to share my heartfelt thanks with all my amazing clients, dear friends, family and referral partners. It is because of your unwavering support and trust that I am able to help so many achieve their real estate dreams and goals. At our recent Jack Conway convention and annual awards ceremony, I was deeply humbled to hear my name called up to the stage. As I walked through the crowd, I reflected on the happy memories and success stories of the past year. While not every listing or sale is without its challenges, your belief in me has helped us overcome every obstacle together.
I am incredibly honored to share that I have received the Top Listing and Volume Awards for our office, ranked among the top 10 agents in the company, and been inducted into the Chairman's Circle of Success. These achievements are not just mine, but a testament to the unwavering support, trust, and encouragement from all of you. Your belief in me has allowed me to help so many people and families achieve their real estate dreams and goals. I am deeply grateful for your continued partnership and friendship. Thank you for being the cornerstone of my success and for allowing me to do what I love at such a high level. Together, we have made this possible, and I look forward to many more successful journeys with you.
With heartfelt gratitude,
Kim
"That's a write off!"
It's a phrase I commonly hear thrown around. But, not so fast... it turns out not all home improvements are treated equally from a tax perspective.
Let's break it down:
1. Home Office Deduction:
To claim a deduction, you must have a dedicated and exclusive workspace. Using your dining table unfortunately doesn’t qualify here.
2. Rental Properties:
When updating rental properties, you won’t be able to deduct the renovation costs.
But, expenses like mortgage interest, property tax, operating costs, depreciation, and repairs are usually eligible deductions to take. Keep a running tally of these expenses.
3. Residential Medical Upgrades:
Expenses related to improving medical accessibility are deductible. This includes constructing entrance or exit ramps, widening doorways, installing railings or support bars, and making bathroom modifications.
4. Energy-Efficient Improvements:
Consider energy-efficient upgrades. Things like installing solar panels, solar water heaters, small wind energy turbines, geothermal heat pumps, fuel cells, and biomass fuel stoves qualify for various tax benefits.
5. Home Sellers Deduction:
If you make improvements to your home before selling it, they can increase your home's basis (purchase price + improvements), reducing capital gains and, in turn, lowering the taxes you'll owe. Keep a running spreadsheet of those improvements!
Make sure to collab with a tax pro to maximize your deductions. What did I miss? Comment below!
Tips on Rental Real Estate Income, Deductions and Recordkeeping | Internal Revenue Service
Now That You're Prepped, Let's Talk Next Steps
1. Contribute to retirement accounts
If you haven’t already funded your retirement account for 2024, you have until the tax return filing due date to do so. That’s the deadline for contributions to a traditional IRA, deductible or not, and to a Roth IRA.
2. Make a last-minute estimated tax payment
If you didn’t pay enough to the IRS during the year, you may have a big tax bill staring you in the face.
3. Organize your records for tax time
Keep track of all the documents you receive in the mail. Collect your receipts and info that you've piled during the year and group similar documents together.
4. Find the right tax forms
5. Itemize your tax deductions
It’s easier to take the Standard Deduction, but you may save a bundle if you itemize, especially if you are self-employed, own a home or live in a high-tax area.
6. Don't shy away from a home office tax deduction
The eligibility rules for claiming a home office deduction have been loosened to allow more self-employed filers to claim this break. People who have no fixed location for their businesses can claim a home office deduction if they use the space for administrative or management activities, even if they don’t meet clients there.
7. Provide dependent taxpayer IDs on your tax return
Be sure to plug in Taxpayer Identification Numbers (usually Social Security Numbers) for your children and other dependents on your return. Otherwise, the IRS will deny any dependent credits that you might be due, such as the Child Tax Credit.
8. File and pay on time
9. File electronically
Electronic filing works best if you expect a tax refund. Because the IRS processes electronic returns faster than paper ones, you can expect to get your refund three to six weeks earlier.
10. Decide if you need help
Tax laws are always changing. You may think that you have an easy filing but that one deduction you may not know you could talk could cost you in the end. Especially, if you've had significant life changes in the last year that may impact your tax one way or the other. Tax professionals are worth their weight in gold.
