If You’re Buying a Home This Year, Whip Your Taxes Into Shape Now
Ah, tax time—that magical time when all your accomplishments of the previous year can be used against you. After all, the more you made, the more you owe! No wonder there’s so much advice out there about finding (perfectly legal) ways to whittle down your adjusted gross income. But if you’re looking to buy a home, you’ll want to try a different tack—the higher your reported income, the bigger the home loan you’ll qualify for. So if you’re planning to buy a house in the next year or two, you may want to be less aggressive about claiming write-offs. As Brian Decker, a loan originator with Guaranteed Rate, puts it: “Is paying an extra few thousand dollars in state and federal taxes for the year worth it to become a homeowner?” We’ll leave that up to you and your financial adviser to decide. But if you want to look worthy in the eyes of a mortgage lender, you’ll need to do some legwork on your taxes, starting now. Here’s what you need to know, no matter what your situation. Read more.