I’ve been lucky enough to have someone do my taxes for as long as I’ve ever had to file them. How did I get so lucky? Because my dad has been lifelong friends with the guy that does them, and he’s always treated our family very well.
I’ve never questioned his ability, but whenever I see something I don’t understand on a tax return, I ask about it, for the simple sake that I want to understand things.
We re-financed our mortgage last year, so when I was estimating our tax return, I entered the closing costs, but when our tax return came back, this wasn’t on here. Only a small portion was.
I knew he was correct. He always is. So, I didn’t sweat it and in fact I waited until after tax season was done before I dropped him an e-mail asking why the closing costs were nowhere to be found.
He wrote back explaining that for a re-finance, the deduction is spread out over the original term of the loan. Our deductible closing costs were roughly $1,200 for the 15-year mortgage, meaning that we’ll see roughly $80 written off each year for the next 15 years. In fact, there was $20 written off in 201, which makes sense given that we re-financed with three months left in the year.
(FYI: For an original mortgage on the property, you can write off the entire closing amount for the year in which the closing took place.)
Good to know!
When it comes to doing taxes, I know that I could likely enter the big stuff. But, honestly, it’s the little stuff like this which makes me really, really glad that we have someone do our taxes.
And not just any someone, but someone we completely trust.
Do you have someone do your taxes? Did you know about the re-finance amortization requirement when it comes to writing off the closing costs?Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.