NOVA Homes Blog: Mistakes Northern Virginia Homeowners Make on Their Taxes

Tuesday, January 20, 2015

Mistakes Northern Virginia Homeowners Make on Their Taxes

It's officially tax season and many Northern Virginia homeowners will start scrambling for the documents necessary to complete their property taxes. But after the paperwork is all rounded up, there are several common mistakes that homeowners are known to make when filing.

Keep these in mind as you prepare to file your taxes this year— avoiding these mistakes is easier than you might think:

Deducting the wrong year for property taxes
A tax deduction for property taxes is taken in the year you actually paid them. Oftentimes, you are not billed for 2013 property taxes until 2014, but according to Houselogic, "that's irrelevant to the feds."

On your federal forms, enter the amount you actually paid in that tax year, despite the date that is on your tax bill. Confusing payments for different years and claiming the wrong amount is a common mistake.

Confusing escrow and the taxes paid
Does your lender escrow money to pay your property taxes? Don't only deduct the amount you escrowed. The amount you pay into your escrow account every month to cover the taxes is likely slightly more or less than your overall property tax bill. Your lender will make the adjustments to make sure the two match up.

As an example: Say you owe $1,200 in property taxes, but your lender collects $1,100 or $1,300 in escrow. You should deduct only the $1,200 or the amount you owe on your ta bill. This is often listed on Form 1098.

Not repaying the first-time homebuyer tax credit
Did you know if you used the first-time homebuyer tax credit in 2008, you are required to pay a portion of that back? In fact, you are required to pay back 1/15 of the credit over 15 years.

Tax time can be stressful for Northern Virginia homeowners! Remember to file or scan necessary documents as you go to avoid scrambling at the last minute.

Ready to start the new year fresh with a new home? I'm here to answer any questions you have!

I happily serve the areas of Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax City, Falls Church, Great Falls, Herndon, Lake Ridge, McLean, Mount Vernon, Reston, Rosslyn, Springfield, Tyson’s Corner and Vienna.

Earle Whitmore

Long & Foster Real Estate, Inc.
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