Essential Documents to File Taxes as a Homeowner

No one looks forward to filing their taxes, but that doesn’t mean this process has to be difficult. A large part of filing involves finding various financial documents and forms to submit to the IRS. If you are an organized person who keeps clear records, then filing your taxes might be easier than you think. 

Buying or selling a home will increase the number of documents you need to provide to the IRS. However, it can also potentially increase opportunities for deductions or credits, lowering your overall tax burden. 

Here are a few necessary documents to file taxes as a homeowner. Gathering these forms early on – before the April 15 tax deadline – can make submitting your taxes easier. Use this guide to find everything you need to file.

Essential Tax Documents for Homeowners

As a homeowner, you will collect documents throughout the year related to the various repairs made to your home and forms provided by your lender. Most tax forms need to be submitted to homeowners by January 31 so they have ample time to share them with the IRS.

Keep an eye out for some of these documents in the mail and save them in a dedicated place so they are easy to access when you need to file.

Form 1098: Mortgage Interest and Points Statement

Your mortgage lender will send you Form 1098 around January 31 of the new year. This is the mortgage interest statement that highlights how much you paid in interest on your home and how many points you paid that year. 

You will receive Form 1098 annually as long as you pay more than $600 in interest. You can deduct your interest paid on your taxes every year until you pay off your home loan. Additionally, you can deduct any points you paid for the year you paid them. For example, if you bought a house this year and paid $6,000 in mortgage points, then you can deduct that amount. However, you cannot deduct these points again in the following years. 

If you sold your house last year and the mortgage was paid off, your lender still needs to send Form 1098 to report the interest you paid as a homeowner. Make sure they have an updated forwarding address so they can send you this form and other mortgage interest statements.

Property Tax Records

You can deduct real estate taxes paid on both the state and local levels. You may need to reach out to your local city or county tax authority that is responsible for keeping property tax records. It is also possible to double-check these records against the tax documents provided by your mortgage lender if they pay property taxes for you. Form 1098 might highlight what you paid in property taxes. 

You may need to itemize your taxes if you want to deduct what you paid in property taxes from your overall bill. Itemizing your taxes instead of accepting the standard deductions is more work, but can lead to additional savings in many cases.

Closing Disclosure or Settlement Statement 

Save your closing disclosures or settlement statements if you bought or sold a home last year. These documents are useful for identifying deductible costs like real estate taxes or mortgage points. These statements show details like prepaid interest, real estate commissions, and escrow payments, which might help you get a larger tax refund. 

Tax laws are constantly changing, which means potential deductions also vary from one year to the next. Most tax experts will ask to see these closing statements when they file for you. 

While you should have saved your settlement statements from the closing appointment, you can reach out to the title company if you lost them. They can likely provide copies that you can keep and submit along with your federal taxes. 

Form 1098-E or 1098-T 

This is not a required form for most homeowners, but it is necessary if you have qualified educational expenses records. Forms 1098-E and 1098-T are used to reflect interest paid on student loans. You will include these documents with the 1098 statement related to your home. 

It’s possible to have multiple 1098 forms if you paid interest on multiple loans. The same can be said about receiving multiple 1099 forms if you are a contractor or have different forms of income. Make sure you have all the necessary 1098 forms before you start filing your taxes.

Receipts for Home Improvements 

Document any major home improvement costs you accrue throughout the year and save the receipts to submit with your taxes. Some home improvements are tax deductible if they are expenses related to energy efficiency or are part of a medical need. You should also save your expense records if you run a business out of your home with a dedicated workspace. You may qualify for home office deductions. 

It is easier to keep repair receipts in a folder that you store throughout the year instead of trying to remember what renovations or fixes you made across 12 months. This is a great example of tax filing not necessarily being complicated but rather requiring organization and good record-keeping.

Form 1099-S

If you sold your home last year, you may receive Form 1099-S from the party responsible for closing the transaction (which is likely the title company). This form reports the profits from the home sale so you can report the miscellaneous income to the IRS. 

However, not every home sale requires the title company to submit Form 1099-S. This is only if you need to pay capital gains tax on the property. If you sold a primary residence, you may qualify for the capital gains exclusion of $250,000 ($500,000 for married couples filing jointly). This means if your home sale profits were lower than $250,000, you won’t receive a 1099-S.

The IRS has multiple exemptions for Form 1099-S. Check online if you aren’t sure whether you should receive this form. You can also contact your real estate agent or title company to discuss your capital gains tax expectations.

Documentation for Energy Credits

Form 5695 is essential for expenses related to energy investments and home improvements related to efficiency. For example, if you installed solar panels, upgraded your windows, and replaced aging insulation, you might qualify for energy tax credits. You will need to save the receipts for these investments and show that they qualify for tax credits.  

Keep in mind that your tax credits aren’t 100% of what you spend on these repairs or renovations. You can expect to receive up to 30% of your costs (up to $2,000) in tax credits. This is still a substantial amount and shouldn’t be ignored when gathering expenses related to your home maintenance. 

Insurance and HOA documents

Home insurance documents and homeowners association forms aren’t typically required by the IRS. However, they may help you document your expenses and clarify information about what your home is worth and what you paid to maintain it.

Even if you don’t need to submit these documents, the new year is a good time to review what you are paying and to ensure these expenses fall within your budget. Once you file your taxes, you might want to shop around to confirm you have the best home insurance at the fairest rate. This way, you will be protected if something happens to your property.

Where Do I Get These Documents?

Another good thing that comes when you need to file taxes is that you don’t need to complete most of these forms yourself. Instead, various parties are responsible for supplying forms that you will then include when you file. You may need to save certain receipts related to home repairs and upgrades, but otherwise, you can reach out to trusted parties if you need help gathering your tax documents. Here are the sources where your tax forms usually come from. 

• Your mortgage lender: They will provide Form 1098 each year before January 31.
• Your county assessor’s office: This is where you can get information about your property taxes.
• Your title company: They can provide settlement statements if you do not have them.
• Your utility companies or contractors: They can provide receipts on energy improvements.
• Your real estate agent or closing attorney: They will provide a 1099-S if you need one. 

It is better to prepare your taxes earlier in the Spring than later, so you have more time to contact these resources and get the documents you need. Reaching out in early February gives you more time to gather your documents than waiting until the tax deadline. 

Do You Need These Documents If You Take the Standard Deduction?

You do not need to gather most of these documents if you plan to take the standard deduction on your taxes. This could be a good option if you don’t have complicated taxes or likely wouldn’t save much from itemizing. However, you should still save any tax forms or relevant records showing income in case you need to review your finances in the future. 

Some credits (like energy-efficient home upgrades) are separate from itemizing, and you can still claim them while choosing the standard deduction. Make sure you get the savings you need so you don’t overpay.

How Long Should You Keep Tax-Related Documents?

While you will need to submit copies of your tax forms to the IRS, it is also important to keep copies for yourself. The IRS recommends keeping tax-related records for at least three years. Many mortgage lenders recommend keeping documents related to the home sale for at least seven years (or as long as you live in the home). 

If you decide to sell your home and buy a new one, you will need to share your tax returns with your mortgage lender. Keeping your returns on hand can make the pre-approval process easier. If you have lost copies of your tax returns, you can request copies from the IRS.  

It is also important to hold on to receipts and documents about home repairs as long as they are relevant. For example, if you replace your HVAC system, save the receipt and documentation of what work was done. This will allow you to prove the age and quality of the HVAC when you sell your home. 

Saving and organizing documents is an important homeownership skill. It is better to have the documents and not need them than to need them and not have them.

Reach Out for Help When You File Your Taxes

Even the most organized homeowners can feel overwhelmed when tax season comes around. It can be hard to track contributions to your health savings account, charitable organizations records, and income records before even considering all of the documents needed as a homeowner. 

Give yourself extra time to file your taxes if you had major changes in your life this year. Whether you bought a house or invested in energy improvements, it will take longer to gather the documents you need. 

If you aren’t sure where to start with your taxes, reach out to your real estate agent. They should be willing to help you find the documents you need. If you are just starting the home purchase or sale process, talk to your agent ahead of time to ensure you save the right information ahead of tax season.

Turn to FastExpert to find a Realtor you can trust. They can help you track your income records, so filing in the Spring feels easier.