Life is full of financial distress and claiming tax deduction is a boon for people. It is not compulsory to own a house to claim a property tax deduction. It includes every property that you own like a land, cars, boats, co-op apartment, home, etc and anything you’ve paid for. Here are few tips to remember before you claim your deduction-
Maintain the records
Always keep the tax records that you have been paying for your personal property. You can also get a copy of your bill from the local taxing authority. Bills of other movable owned assets are equally important to get reasonable deductions. Use Schedule A to file a return i.e. you have to itemize your taxes instead of taking standard deductions. Keep a check on what IRS (Internal Revenue System) doesn’t allow for deductions, like property that you don’t own, assessment for public properties (streets, sidewalks, parks, etc), service taxes (water, light, etc), transferred taxes after the sale of the house, etc. Rental or commercial properties are not included in personal properties. According to the Internal Revenue System, your personal property includes your primary home, vacation home, land and foreign property.
Get the refunds in the same year
Taxes paid through escrow account of your mortgage can also get tax deduction. In such a situation, your mortgage lender has to remit payments to the taxing authority on your behalf. Get your deductions in the same year you paid the taxes. Due to long procedures of escrow account and mortgages, this might be a complex task but don’t let them fool you with any delay.
Get deduction on rental property
If you’re renting your vacation home, keep an account for all the activities. Under Section E, rent it for at least 14 days and utmost 15days or 10% of the total rental days for your own use.