A new tax season is upon us, and even though taxes aren’t due until April 15, 2024, it pays to get organized. Tax filing season began on January 29, 2024, and all taxpayers should have received their information returns, including their W2 and 1099 forms, for the 2023 fiscal year. 

 

Below is a comprehensive guide for all of the documents you may need to provide before filing. 

 

Form 1098, Mortgage Interest Statement

The 1098 tax form is an interest statement used by lenders to report the amount of interest paid by a borrower during the calendar year. For borrowers that have paid more than $600 in interest on their home loan in 2021, that interest may be deducted from their taxable income. 

 

The current deduction limit is $750,000 for a mortgage. Single filers can deduct the full amount and married taxpayers filing separately can deduct $375,000 each. 

 

Borrowers can expect to receive their 1098 form from their bank or mortgage servicer for both their first and secondary loans. If a borrower has refinanced or had multiple mortgages throughout the year, all 1098 forms will need to be furnished. 

 

Documents for Recent Purchases and Refinances

If you have purchased or refinanced your home this year, it’s recommended to provide a copy of the closing disclosure form (CD) to your tax preparer. 

 

Borrowers that put less than 20% down on a new home and are paying private mortgage insurance (PMI), a premium deduction is available if the following statements are accurate:

 

• You itemize your deductions
• The premium is for a new mortgage

 

If you meet the above criteria, your deduction will be dependent on your income: 

Your reduction is reduced by 10% for each $1,000 your adjusted gross income (AGI) exceeds $100,000 or $50,000 if married filing separately. 

 

Your reduction is eliminated if your AGI is more than $109,000 or $54,500 if married filing separately. 

The official IRS code for deducting mortgage insurance, including PMI premiums, can be viewed in Publication 936.

 

Your mortgage insurance (PMI) can be found on your final mortgage statement for the year.

 

Real Estate Property Tax Records

You may deduct up to $10,000, or $5,000 if married and filing separately, for a combination of property taxes and either state and local income taxes or sales taxes.

 

Not all lenders provide documentation on the amount of taxes paid in a given year. To determine the amount of real estate taxes paid in the calendar year, homeowners can use the tax bill received from their municipality.

 

Property taxes can only be deducted within the same year that they’ve been paid. Billing cycles may encompass a portion of two separate years, so it’s important to double-check. You can only deduct the pro rata share of the annual real estate taxes for the period of time you owned the home. 

 

Forbearance

If you were in forbearance and your lender paid your property taxes, it is recommended to check with your trusted tax professional to verify if you can still deduct your taxes.

 

Rental Properties

For investment properties, the following is a list of some of the documents needed to prepare your tax returns:

 

• Documentation on the revenue you received 
• Form 1098 to document interest paid
• Your real estate tax bill per calendar year
• Your homeowners insurance premium paid
• Renovation costs
• Management fees
• Legal and Professional services
• Repairs
• HOA fees
• Advertising
• Realtor fees

 

It’s recommended to speak with your trusted tax preparer on what additional documentation may be needed to verify the expenses paid.

 

Airbnb, VRBO, and Other Rental Platforms

The income earned from vacation rental platforms is not tax-free. Whether it’s one room or an entire house, if you rent a space out for more than 14 days in a year, all the rental property information above will apply. This includes the money you receive for renting out your property, as well as any extras you may tack on, such as cleaning and maintenance fees. 

 

The amount you should report on your taxes is the gross income you’ve earned from all of your rentals. 

 

It is your responsibility to keep track of your rental records and business expenses. However, Airbnb will provide a 1099 for users that make over $20,000 and have over 200 transactions annually. If you use a rental service outside of Airbnb, such as VRBO, check their website for details on what they will provide.

 

Form 8829 for Self-Employed, Remote Workers  

Recent years have led to an increase in people working from home and utilizing home offices. Form 8829 allows remote freelancers, gig workers, and business owners to deduct any relevant expenses. 

 

Just because you are self-employed and working from home doesn’t necessarily mean that you can write off your expenses. The IRS specifically outlines which expenses are eligible for a home office tax deduction: 

 

• The area you use for work within your home must be your sole place of business.
• You must have a dedicated area that you use exclusively for business, and only expenses generated directly by that area can appear on Form 8829.
• You can only deduct expenses from the portion of your home used exclusively for work. For example, you can’t work in your home office and deduct your kitchen renovation. 

 

Speak with your tax provider for further clarification on how Form 8829 pertains to your individual circumstances.

 

Closing Thoughts

Navigating tax season may feel daunting, but with the right amount of preparation, you’ll be ready to file with ease. Check out our website or give us a call if you have any questions about the documents listed above!