Taxes, Refinancing and Mortgage Modification: Four Useful Tips

If you’re like most Americans, April 15 is not your favorite day of the year. The day the tax forms are due. With all of the economic upheaval, filing this year may be trickier than others, which weren’t all that easy in the first place. If you are a first –time buyer refinanced your home or had your mortgage modified, though, the extra complexity could work in your favor.

Ryan Boyajian is President of We Save Homes, Inc., a software company whose eTurboMod package makes applying for a loan modification as easy as filing your taxes with any of the programs that have become so popular lately. He offers some advice for homeowners who want to take advantage of the many changes to the tax code that were recently passed.

“First off,” he says. “get an expert opinion if you are unclear about whether you can take certain deductions or claim various credits. That doesn’t mean you need a lawyer or accountant. The IRS will let you know your status. The key is to call them now because it April, you’ll probably get a busy signal.

“Second, to get most of these deductions and credits, you’ll have to itemize your deductions by filling in Schedule A. That’s extra paperwork, but we’re talking about saving thousands of dollars. And there are plenty of other deductions that you can claim beside mortgage-related items that make this worthwhile.

“Third, pay special attention to recent innovations. For example as of 2007, cancelled or forgiven mortgage debt doesn’t count as income that you have to report. So, it you had more mortgage modified in 2009, the amount forgiven won’t count against you. Your lender will have to send you a 1099-C form. If you don’t get one soon, call and ask for it. In most cases, this applies to refinancing situations. And if you paid points for a refi, that’s deductible as well.

“Fourth, remember that your state may have different rules than the federal government. Check with your local tax authority to see if there is a special part of your local tax code that can save you even more.”