Tax Credit for Paying Mortgage or Rent in Some States

Some states have a tax credit for paying your mortgage or rent for the year. This credit is called Homestead Credit. The basic definition of a homestead is any place where you have resided for a year and paid mortgage or rent for. Some of you renters may think you don’t qualify if your state provides it, because you don’t pay property taxes. This is not true, because your landlord or owner does. I use to live in Wisconsin for most of my life renting an apartment. My average extra state return on homestead alone was between

400 to 700 dollars extra. Providing I lived in that state the whole year, and my landlord filled out a 1 page rent certificate. If your landlord does not sign your rent receipt, you can also mail in a copy of your rent receipts to the irs with your tax return. A rent receipt and schedule H homestead credit form can be downloaded from your state Irs web site as well as instructions on how to fill it out. It is very easy, and you can always have a tax preparer do the rest of your hard taxes. After it’s done you can do the homestead credit tax portion yourself.

Did you know that if your state accepts homestead tax credit, that you can go back up to 5 years, if you never did them before? Think of 5 years worth of extra refunds. Most people qualify for this credit depending on your states limit, if their income for the year is below 24,000.00. That’s a great many of us,

And remember you can do an easy search engine search for these tax forms and rent certificates with the year you need. They don’t need to be sent in with your taxes at the same time.

Many people don’t know about this credit, because the Irs most likely discourages tax preparers from volunteering this tax credit. The reason is because many tax agencies are owned by the government. I

Believe HR Block is a good example. I had a friend that god knows why took his taxes to several offices one year. He came up with several different tax statements. I wonder why tax preparers offer pay for audit protection? Maybe because their unsure what their doing themselves in some cases. After all, we all have different taxes, and it can’t be easy to do so much and not make a mistake. Even on Turbo Tax which I first started using did not tally in homestead credit except for the year I was making income for self employment and filed the schedule C own business tax form. It was the only section I saw them offer the credit in, and its funny that most business owners make to much for that credit. I actually didn’t do so well that year, and made the bracket.

It will also be important to save receipts for your household utilities. The more grocery receipts you saved you will report to. This means more credit back. If you don’t know what you paid, call your electric company via utility company and ask. It takes them minutes to tell you your yearly payments, and then request a statement of proof in case of a future audit. Of course you know to save all tax receipts for at least 7 years back. How many of you ended up owing the IRS, and a big homestead credit could make the difference of owing or not? Even a return.

So please check your local IRS state web site to see if you get homestead credit. If you never filed before just think how many thousands you will get back for the last 5 years. The hardest work may be seeing old landlords for rent certificates to be filled.

Also remember that there are probably other credits you can qualify for that I didn’t mention. Do not trust a tax preparer to tell you. Look into it yourself. Hope this was helpful.