W2, 1098, 1040EZ… That’s not code—it’s a reminder that tax season is just around the corner. Today’s Angie’s List report offers advice to help decode the tax changes that will impact homeowners in 2018.
To help homeowners lower their bill as much as possible, tax professionals advise that good record keeping can save you money.
But which records do you really need to keep?
According to Theresa D. Props, CPA, there is a lot you should keep.
“Receipts and documents, notices from the IRS, anything that would have to do with improvements in your homes or real estate taxes, an assessment, anything that has to do with your home. You need to keep those documents.”
Complete documentation will help paint an accurate picture of the previous year, no matter what you’ve been through. For instance, homeowners impacted by natural disasters such as floods and hurricanes can deduct a portion of their losses on their tax return. But the guidelines are changing.
“Beginning in 2018, you can take advantage of these deductions if you’re in a federally declared disaster zone. In order to see if you qualify, check IRS.gov or check with your tax consultant,” said Angie Hicks, Co-Founder of Angie’s List.
This is another instance when good record keeping will benefit your bottom line.
“You want to have your purchase price, you want to have all your improvements, and then you are supposed to get a fair market value on those dates, on the date of the disaster. That, together, is the amount of loss that you would take,” advises Props.
A certified public accountant can determine the best time to claim that loss and which deductions are best for you. Speaking of deductions, that’s another big piece of the tax code that will change.
“The standard deduction has always been rather low. However, in 2018 they’ve increased the standard deduction, almost doubling it,” Props said.
Hicks suggests getting help if you need it. “If you’re curious about how the tax laws might impact you, reach out to a certified public accountant and do your research early.”
If you need assistance, don’t be afraid to take a shoebox of receipts to a tax professional—they’ve seen it all before.
Props said reassuringly “The thing people have when they come in is normally anxiety, especially if they’ve not been to a CPA before. And you’ve got to realize that we’re all on the same team. We want you to pay less taxes, and you want to pay less taxes, so we have a common goal.
For more advice on hiring a tax professional, check here: