Home Sweet Tax Savings: Year-End Tips for Homeowners & Buyers

Are you ready to save money on your taxes this year?

In this episode, I dive into essential year-end tax tips for homeowners and homebuyers. Learn how to maximize deductions like mortgage interest, property taxes, and home office expenses, and discover tax breaks for new homebuyers, including homestead exemptions and energy-efficient upgrades.

Whether you’ve owned your home for years or just purchased your first, this guide will help you prepare and organize for tax season while keeping more money in your pocket.

What You’ll Learn:

• Why year-end tax planning is crucial for homeowners and buyers.
• Key tax deductions for homeowners, including mortgage interest, property taxes, and home office expenses.
• Special tax breaks for recent homebuyers, such as deducting points and claiming homestead exemptions.
• How energy-efficient upgrades and medical-related home modifications can save you money.
• Important reminders for Alabama listeners and military families.
• How to stay organized with tax documents and avoid penalties for new 2024 regulations.

Resources Mentioned:

• BOIR Filing: bioefiling.fincen.gov
• Homestead Exemption Details: Contact your local tax assessor’s office.
• Proverbs 16:9 for Inspiration

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Email: jan@yourrealestatemama.com
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Transcript

Introduction and Welcome
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[00:00:00] Uncle Sam: Howdy folks, it's me, Uncle Sam. I know taxes aren't exactly your favorite topic, but hey, I don't make the rules, I just collect the, uh, donations. Don't worry though, mama's got your back with some real estate tax tips to help keep me from taking too much of your pie.

[00:00:16] Jan: Today we're going to go over deductions you might qualify for as a homeowner or home buyer.


Meet Your Host, Jan Scott
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[00:00:30] Jan: Hey there! Welcome to Your Real Estate Mama. I'm Jan Scott, and I'm here to help you navigate the ups and downs of buying or selling a home. I've been wrangling the real estate market for over 35 years, and trust me, with all this gray hair comes a whole lot of wisdom. I'm excited to share tips, a little humor, and plenty of encouragement to make your journey easier.

[00:00:54] Whether you're new or regular. I'm so glad you're here. Follow the show for new episodes every week and together we'll grow and help even more folks.


Importance of Year-End Tax Planning
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[00:01:05] Jan: Well, with the year winding down, it's the perfect time to talk about one of my favorite topics, tax deductions. Today, we're going to go over deductions you might qualify for as a homeowner or a home buyer.

[00:01:19] This year no matter where you live and as for my Alabama listeners I've got an important reminder about claiming your homestead exemption before the year ends. So let's jump right in Well, why end of the year tax planning is essential. You know, tax planning may not be one of your most exciting tasks on your to do list, but it's one of the most important.

[00:01:42] And I'm very blessed at my house to have a very organized husband who keeps track of every receipt. I left and told my accountant one year, if anything ever happens to my husband, you will have your hands full with me because if it were up to me, I'd take a shoe box and dump all the receipts on your desk.

[00:02:03] So you don't want to be like me. You want to be like my husband. Taking time now to organize your finances and understand what deductions you qualify for. You can save a lot of money when tax season rolls around. So whether you're a long time homeowner or just purchased your first property, there are few opportunities to reduce your taxable income, but the key to it is to act now.


Tax Deductions for Homeowners
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[00:02:28] Jan: Before December the 31st, let's talk about tax deduction for homeowners. You know, along with home ownership comes a lot of benefits, and tax deductions are one of the biggest. If you have a mortgage, the interest you pay through the year is typically deductible. This is often the largest deduction for homeowners.

[00:02:49] So it's worth double checking your paperwork to make sure you have the proper documents. Normally, your lender will mail you a end of the year interest statement that you can just take right to your accountant to put on your taxes to show exactly how much interest you have paid on your mortgage.

[00:03:06] Another deduction is property taxes. They're a common deduction and if you've paid property taxes on your home this year, You can deduct up to 10, 000, including state and local taxes. And for those of you who made a down payment of less than 20 percent and are paying private mortgage insurance, you may also qualify to deduct those premiums if your income falls within the IRS limits.

[00:03:32] Now for anyone working from home, the home office deduction can be a game changer and a lot of us work from home these days, so if you have a dedicated workspace in your home. You may be able to deduct a portion of your utilities, your internet, even your mortgage. Just remember the space must be exclusively for work.

[00:03:53] And I highly recommend you document it in every way. Just in case a tax auditor comes a callin If you made any energy efficient improvements to your home, like installing solar panels or replacing old windows with energy saving models, you may qualify for federal tax credits. These upgrades not only save on utilities, but you can also put money back in your pocket at tax time.

[00:04:20] Let's talk about capital gains for a minute. For those who sold a home this year, you might be able to exclude up to 250, 000 for the profit from your taxable income if you're single, or 500, 000 if you're married and meet certain guidelines. The rule is you must have lived in the home for two out of the last five years.

[00:04:39] Then you do not owe any capital gains tax. By the way, capital gains tax is the tax you owe on the profit you made on the sale of your home. This exemption is only allowable once every two years, so be sure and check with a tax professional to see if you qualify.


Tax Deductions for Recent Homebuyers
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[00:04:57] Jan: Okay, deductions for recent homebuyers. If you have bought a home in 2024, 2024.

[00:05:02] First of all, congratulations. In addition to the pride of home ownership, you may be eligible for some unique tax breaks. Like if you paid points on your mortgage to lower your interest rate, those points are deductible in the year you paid them. Additionally, While most closing costs aren't deductible, prepaid property taxes or mortgage interest at closing may qualify.

[00:05:27] Your closing attorney will give you what they call a closing statement that will have all this broken down on it and you can take it to your tax accountant. You can get your figures from that. For any active duty military members out there who have had to move due to a permanent change of station, moving expenses may also be deductible.

[00:05:47] So be sure you check into that. For my listeners in Alabama and a few other states, be sure and check the state you live in, by the way. If you purchased a home this year, don't forget to claim your homestead exemption, which is due before December the 31st. The homestead exemption reduces the taxable value of your home.

[00:06:07] which means lower property taxes. So to claim it, you visit your local tax assessor's office with your deed and a proof of residency. This is an easy way to save money, but if you miss the deadline this year, you'll have to wait a whole new year before you can change it.


Additional Tax Saving Opportunities
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[00:06:23] Jan: A few other tax saving opportunities.

[00:06:26] Don't forget about charitable contributions made before the end of the year can also be deducted. If you've donated money, items of clothing, or furniture, be sure to keep receipts as proof. Additionally, if you've made home modifications for medical reasons, such as installing ramps or widening doorways, these expenses may qualify as deductible medical expenses.

[00:06:51] Finally, keeping organized records is the key. Start gathering your receipts, mortgage statements, and tax documents now so you're prepared when it's time to file. As we're talking about keeping things organized, for my listeners who have a corporation or LLC or small business of any kind, remember to register it with the government.

[00:07:13] It's called a B O I R. Which stands for Beneficial Ownership Information Report. It's new for 2024. And if you have any kind of corporation, this must be done before December 2024, or you could face fines of over 500 per day until you do. Best place to find out more information is at their website, B O I E F I L I N G dot F I N C E N dot gov, and that's biofiling dot FinCEN dot gov.

[00:07:51] As always, I encourage you to work with a skilled tax professional who can help you maximize your deductions while ensuring full compliance with regulations. You know, just like a great realtor is a priceless asset, a great tax consultant is truly worth every penny.


Final Thoughts and Inspiration
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[00:08:09] Jan: As always, I like to wrap up with a little mama wisdom and inspiration.

[00:08:13] As we close out this episode, it's the perfect time to reflect on all you've accomplished this year and be thankful for the blessings in your life. As we look ahead to a new year, take some time to set some fresh goals, whether it's excelling in your career. Improving your health or deepening your relationship reminds me of Proverbs 16, nine, that says the mind of man plans his way, but the Lord directs his steps.

[00:08:41] Let me encourage you to seek God's guidance in every decision. I can say from personal experience that when I put my plans in his hands. Life is much smoother and more meaningful.


Closing Remarks and Contact Information
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[00:08:57] Jan: Well, that's a wrap. Follow the show for new episodes every week. Don't forget to leave a review, rating, or comment on your favorite podcast platform. Feel free to send me an email to jan@yourrealestatemama.com. I love hearing your questions and comments, and I'd be happy to help you find a great real estate agent anywhere you live.

[00:09:20] Be sure to follow me on Facebook @YourRealEstateMamaPodcast. Until next time, y'all take care, happy house hunting, and remember, you should always listen to your mama.