The new year dawns and our minds inevitably turn to….taxes. Perhaps one of the lesser highlights of the year, but an important one nonetheless. If you are a homeowner, then you should be aware of the following tax-related issues.
Ohio Homestead exemption: This special allowance enables homeowners that are disabled or senior citizens to shield $25,000 of home value from property taxes. The catch is you must sign up for this exemption between January 8th and June 2nd. Check the Ohio Department of Taxation website for details.
New home property assessments: Homeowners in Hamilton, Butler, and Clermont counties received new property assessments in 2008. Many individuals were surprised to see their values go up when all the news stories suggests home prices are down. While many factors go into the assessments, you do have the option to appeal in case you think your assessment is too high. Again there are time limits though. For example, in Hamilton county you must file a complaint on the valuation prior to March 31, 2009. For more information on the appeals process, consult these county auditor websites:
Energy improvement credits: Most energy efficiency credits expired at the end of 2007, only to be renewed in 2009. However, certain renewable energy incentives for geothermal and solar based equipment were available for '08 (along with hybrid vehicle credits). For a complete overview of energy based tax changes, see the Alliance to Save Energy website.
Itemized tax deductions: The granddaddy of tax deductions is real property taxes and mortgage interest. A majority of homeowners find that they benefit when they itemize deductions vs. taking the standard deduction. If you do your own taxes, most tax software will determine which method will benefit you the most.
Points and Mortgage Insurance: This is another area where certain mortgage fees may be deductible. If you paid points or mortgage insurance when you purchased or refinanced a home, then you will want to take the appropriate deductions.
Investors: Those of you with rental property are probably already familiar with rules around depreciation and passive activity investments, but work with your tax advisor to take full advantage of improvements and other deductions.
For all the details on homeowner tax deductions and credits, go to IRS.gov.