HouseLogic Tax Guide

As tax season approaches, we all can use reminders and tips. Today’s is about how long to keep those records. Enjoy!

HOUSELOGICS:

File-with-Confidence Tax Guide

How Long to Keep Tax Records: A Checklist

For most tax deductions, you need to keep receipts and documents for at least 3 years.

Unless you live in a Hollywood Hills mansion, you probably don’t have space to store years of tax and insurance paperwork, warranties, and repair receipts related to your home.

But you need that paperwork if you need to prove you deserve the tax deductions you took, to file an insurance claim, or to figure out if your busted oven is still under warranty.

To help you organize your piles of papers, we’ve created a handy checklist of how long to keep tax records.

First, a little background on IRS rules, which informed some of our charts:

·        The IRS says you should keep tax returns and the paperwork supporting them for at least three years after you file the return — the amount of time the IRS has to audit you. So that’s how long we advise.

·        Check with your state about state income tax records. Most states make you keep them as long as the federal government does — three years. But Montana wants you to keep them for five years. And Ohio recommends you hang on to them 10 years. Yes, an entire decade.

·        The IRS can also ask for records up to six years after a filing if they suspect someone failed to report 25% or more of their gross income. And the agency never closes the door on an audit if it suspects fraud. Just sayin’.

Get tip on home buying taxes

Closing Costs

The one-time home purchase costs that are tax deductible as closing costs are real estate taxes charged to you when you closed, mortgage interest paid when you settled, and some loan origination fees (a.k.a. points) applicable to a mortgage of $750,000 or less.

But you’ll only want to itemize them if all your deductions total more than the standard deduction.

Costs of closing on a home that aren’t tax deductible include:

  • Real estate commissions

  • Appraisals

  • Home inspections

  • Attorney fees

  • Title fees

  • Transfer taxes

  • Mortgage refi fees

Mortgage interest and property taxes are annual expenses of owning a home that may or may not be deductible. 

CALENDAR FEB/MAR

February Events

Feb. 22  Board of Directors Meeting                             
10 AM 
                Mt. Pleasant County Club

March Events

Mar. 10 Spring Ahead                                                 Turn your clocks up 1 hour

Mar. 17 Happy St. Patrick’s Day!

Mar. 21 Board of Directors Meeting

2019 FHA Loan Limits

FHA Announces 2019 Loan Limits

On Dec. 14, 2018, the Federal Housing Administration (FHA) released its 2019 Loan Limits, effective January 1, 2019. FHA's loan limits are tied to the loan limits set by the Federal Housing Finance Agency for conventional mortgages. In high-cost areas the FHA national loan limit "ceiling" will increase to $726,525 from $679,650. FHA will also increase its "floor" to $314,827 from $294,515. Alaska, Hawaii, Guam, and the Virgin Islands have a special exception ceiling of $1,089,787 to account for higher costs of construction. Loan limits increased in 3,053 counties and remain unchanged in 181 counties. No jurisdictions faced a decrease in loan limits. Increases in median house prices across the country accounted for the increase in loan limits for 2019.

Any community that wishes to contest its loan limit must submit an appeal to FHA's Santa Ana Homeownership Center no later than January 14, 2019.

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A New Way for Prospective Home Buyers to Start Saving for Their First Home In Iowa.

BUYING A FIRST HOME JUST GOT EASIER

The Iowa legislature recently passed a law that allows individuals or couples to save money in a 10-year tax-deductible savings account to go toward the purchase of a home.

Annual contributions have no limit, however, tax deductions are capped at contribution totals of $4,000 for married joint filers and $2,000 for all other filers.

Individuals and couples qualify for this program as long as they haven’t owned a home of any kind for at least three years.

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