As we’re getting into tax season, you could be impacted in a big way if you moved last year. If you did, your tax return is about to get a little more complicated. At Sotheby’s Scottsdale, I thought I’d share a few scenarios that could affect you and what you should know moving forward.
Moving to Arizona
If you just moved to a Sotheby’s Scottsdale home from another state, you’ll need to file a part-year tax return. It doesn’t matter if you changed employers or stayed with the same company during your move. Your W-2 forms will provide income information for each state you lived in.
You might want to look at an online service for assistance if you plan on filing your own taxes. Many of the online programs will facilitate a question-and-answer format. The online programs might also help in answering questions as to whether you’re able to deduct moving expenses.
If you bought a home
There are many perks to being a Sotheby’s Scottsdale homeowner. You can deduct mortgage interest, real estate taxes and loan origination fees.
If you bought your home with a mortgage, you’ll need a 1098 form from your mortgage company. This form shows deductible mortgage interest for your Sotheby’s Scottsdale home, points if the buyer paid any, and real estate taxes paid out of escrow. If you paid mortgage insurance premiums last year, you can also deduct that money.
If you paid cash for your Sotheby’s Scottsdale home, you won’t need a 1098 form and won’t obviously be able to deduct mortgage interest or loan origination fees. However, you’ll still be able to deduct real estate taxes.
When filing your taxes, you’ll also need the closing statement and Closing Disclosure. Both forms explain the financial details.
If you sold your home
While there are not as many tax perks when selling your Sotheby’s Scottsdale home, you can still keep the money made from the sale tax-free. usnews.com says, “A profit of up to $250,000 for individuals and $500,000 for couples filing jointly does not have to be reported to the IRS as long as you primarily lived in the residence for at least two of the last five years.”
You should keep track of any major home improvement projects, as well, since you can subtract the expense from the profit as expenses for the home.
As you get ready to file your tax return, just remember you could be entitled to some additional deductions if you moved last year.