It’s tax time again! Preparing your federal and state income taxes is stressful enough. If you now own a home, there can be a whole new level of questions to which you might not have the answers. Making mistakes on your taxes can mean many things. You can end up owing more than you need to if you don’t maximize your deductions. You deserve the refund you’re entitled to get, and avoiding these Louisville homeowner tax errors will help you get your check and reduce your chance of an audit. The keyword we want to remember here is “points,” a simple term used to describe charges from a borrower to obtain the mortgage. It also describes mortgage fees, lender fees and other costs incurred. It’s only when they’re interest paid in advance that you can claim them as tax deductable and only when your loan applies towards improvements of your home. You must have paid the same amount of cash (if not more) into your home mortgage as the amount of points that are paid. The amount paid out cannot surpass the price normally charged in your area. You must also use the cash method when it comes to accounting for your expenses. State your income the year you obtain it and deduct the expenses in the tax year in which you paid the points. As far as property tax is concerned, if you paid the taxes owed by the seller at closing, you can’t deduct that amount. You have to consider it as part of your costs in the property. Hopefully you’ll have a pleasant tax season in 2010, and remember if you’re interested in commercial property or home ownership in Louisville, contact Louisville Properties at 502.744.9505.