We are into February already, if you can believe it, which means it is time to start bracing yourself for tax filings. As we get further into tax season, more information and paperwork is going to continue to fly in, leaving the documentation you already have in an often precarious position in your filing cabinet.

To help you prepare for tax season this year, I just wanted to go over a few items which you will want to gather up if you purchased a house last year. First and foremost, I hope you kept your settlement documentation. This was the paperwork the closing attorney gave you, probably in a very fancy folder, which you likely never looked at. You will need this information if you bought a house last year because it will show how much you paid in closing costs, how many points you paid, how much your interest will be, and how much you paid in taxes.

And the reason you want this information is simple: it is all usually tax deductible. For the interest, the lender will send you a form 1098 with the total taxes paid last year, so you will also want to keep an eye out for that form. But for the rest, it is often up to you to properly calculate what to write off, and you or your accountant can only do that with the closing documents.

Additionally, you want to be careful if you sold a home to buy your new one, as there are also potential tax consequence in the form of capital gains and/or losses.

Now, I am no tax expert, and I don’t try to position myself as one, but I would recommend finding that paperwork, wherever it is buried, to give to your tax preparer or CPA.

And if you have any questions about what the tax implications could be for buying a new house this year, or to get prequalified for a house this year, please contact me. If you have anything else to add about the importance of keeping mortgage documents after closing, please leave a comment.