The first quarter of any new year brings a lot of tax implications or should I say tax action on your part.
1. If you bought a home in 2020 you will want to file homestead to lower your property tax from a nonexempt status.
2. If you bought or sold a home in 2020 you will need to use your closing disclosure to determine what can be deducted from your Federal income taxes.
I will address each of these action items below:
As with any tax information, consult your tax professional for complete information
Filing Homestead Exemption
You must have owned your home on January 1, 2021 to file. You have until April 30, 2021 to complete the form and you (or your mortgage company) will not see the result of this action until your bill comes out in November 2021. This is a free service. Do not pay anyone or a company to do this for you. If you bought a home with an existing Homestead on the home, you will have kept the existing homestead through 2020 but now you must apply in your name. Your driver’s license must read the new address. You can do all of this, driver’s license and file homestead on line. Go to the websites listed below, type in your address to confirm change of ownership, as well as, fill out the form needed to file homestead exemption or print document and mail.
Texas Department of Public Safety
Collin County | 972.578.5200 | www.collincad.org
Dallas County | 214.631.0910 | www.dallascad.org
Denton County | 940.349.3800 | www.dentoncad.com
Ellis County | 972.937.3552 | www.elliscad.org
Rockwall County | 972.771.2034 | www.txcountydata.com
Tarrant County | 817.284.0024 | www.tad.org
Using information from the closing disclosure on you Federal Income Tax Return: Some of your closing costs might be deductible on your federal income tax report. Consult your tax consultant on the items that can be used.
If you sold a home in 2020, you may remember giving the buyer your prorated share of your tax liability for 2020. The closing disclosure is the only place you will find this information to use as a deduction on your taxes.
Under current law, there is no capital gains tax liability from sales profit of your primary home with the following limits…Married couples can exclude up to $500,000 of gain when they sell their home and $250,000 for individual homeowners. The home must have been your principal residence for at least 2 of the last 5 years.