It’s Tax Season: Here Are the Mortgage Documents You Need
Somehow, it’s 2023, and it’s already time to start prepping those tax returns.
Sure, we have another few months before they’re technically due, but we all know: The sooner you file, the faster that refund comes. (And who couldn’t use a little extra cash after the holidays?)
You’ll need the usual: W-2s and 1099s, statements for your retirement accounts and assets, and documentation of your education and childcare expenses, among other items. And if you’re a homeowner (especially a newly minted one)? You’ll need a handful of mortgage documents, too.
Here’s a quick list of the mortgage documents you’ll need to file your tax returns:
The 1098 is your mortgage interest statement. It shows how much interest you paid on your mortgage loan across the year. If you choose to write this interest off from your taxable income (as long as you itemize your returns), you’ll use this form to prove how much you paid.
In some cases, you may have several 1098s. This might be the case if your loan was transferred to a new servicer during the year (you’d then have one from each servicer, stating how much you paid them). Or it could happen if you have multiple loans (home equity loan or HELOC, for example) or multiple properties — like a vacation home or second house.
Your servicer should send you these documents by the end of January, but if, for some reason, you don’t receive these, you can usually go to your online mortgage dashboard and download the document there.
If you bought a home in the previous year, your closing statement is important too. Like with mortgage interest, you can also deduct any points or interest you pay at closing. This can reduce the taxes you owe on your annual returns.
Property tax statement
Property taxes are also deductible, and while they’re often noted on your 1098 forms and closing statements, there’s a chance they might not be — particularly if you chose not to use an escrow account.
Home improvement receipts
As a general rule, home improvements aren’t deductible, but there are some cases when they might be. For example, if your updates were medically related (say, a wheelchair ramp), they could be a medical write-off. If they improve your home’s energy efficiency (like a solar panel system), they might qualify you for a write-off or valuable tax credit.
What mortgage documents do you need?
Homeownership can qualify you for a whole slew of tax benefits, so make sure to speak to a tax professional to ensure you’re taking advantage of all the ones you’re eligible for.