DAT Financial & Tax Service

Real Estate and Mortgages

Advice For Selling

Mortgage and Refinancing

Rental Property Owners

Please record your rental information on this form.

Consider paying for repairs and maintenance before the end of the year to claim deductions on your income tax return. But before accelerating major repair projects, be sure you'll be able to make use of the extra deductions on your return.

Landlords can generally write off up to $25,000 in rental-related expenses in excess of rental income each year. This $25,000 allowance, however, is reduced for owners with adjusted gross incomes above $100,000. And owners with adjusted incomes above $150,000 can only deduct rental-related expenses to the extent of rental income. Remember major improvements must be depreciated rather than deducted all in one year. Please bring a list of all improvements/major purchases with the date and cost of each to your tax appointment.

Year-End Strategies for Homeowners

Most homeowners can take extra deductions on their income tax returns simply by paying deductible expenses before the end of the year. If you have a home-based business, plan to refinance or are about to sell a vacation home or investment property, consider your options.

Home Office

If you're eligible to claim home-office deductions, consider paying your homeowner's insurance premiums, utilities, homeowners association and other expenses. Part of those bills may be deductible business expenses.

Pay Property Taxes

Some homeowners can pick up extra deductions by paying their property tax bill by December 31, even if the taxes aren't due until April 10. This strategy is only for homeowners who send their payments directly to the taxing authority, not those who pay their taxes to an escrow account with a lender.

Paying early is also a mistake for higher-income homeowners who expect to be subject to the alternative minimum tax this year. Property taxes aren't deductible under the minimum tax formula.

Review your real estate tax bill to make sure you have filed for the homeowner's exemption, if you live in an owner-occupied home. The exemption is worth $70. Call the assessor's office (619-531-5772 if your home is in San Diego County) if you need to file for the exemption and they will send you the forms and let you know when it can become effective. Also, be sure to pay any supplemental taxes if you bought a home during the year. You (not your escrow account with your lender) are responsible. The paid supplemental taxes can be added to your annual taxes for your deduction. However, Mello-Roos taxes paid on some homes in California generally are NOT tax-deductible, but are added to the basis of your property. Contact the community facilities district collecting the tax that is listed on your tax bill for more information.

Property Taxes for Homeowners with Declining Home Values

You may be able to have your real estate tax lowered to match the lowered assessed value, if your home is worth less than your purchase price. This applies to investment properties as well. Contact the assessor in the California county where your property is located for a property tax re-assessment (858-505-6262 for San Diego County).

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