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Buying a Home During Tax Season

Tax Season Cometh!

0 taxes

Does anyone enjoy tax season?  I doubt it!  I get so overwhelmed when I start getting my W-2’s, 1098, etc. in the mail.  I try to put everything in a safe place, but, with a toddler, two dogs, and a full-time job, I can never seem to keep it all straight.  I’m usually really good with organization when it comes to a process I perform often (i.e. a loan pre-approval, laundry, writing a blog post).  However, when I do something only once a year, I find that it is hard to recall exactly the process I used the previous year, and I feel lost.

My System

The one thing I try to do at the beginning of every year is label a new filing folder with “Taxes” and that year; this year the folder will be labeled “Taxes 2014.”  That way, when I have a receipt from a donation or something else that is tax-related, I can file it away and have it when I need it.  And, that’s the system.  Sorry it wasn’t more impressive!

Thank goodness for our accountant.  Every years she sends us a nice manila envelope with a questionnaire and a checklist to make sure we have rounded up all of the documents she needs to accurately complete our tax returns.  I don’t know what we would do without her!

Tax Season and Your Home Purchase or Refinance

If you are purchasing or refinancing your home during tax season, things can get a little messy if you don’t stay organized.  Here are the dates our company is using as a deadline for requiring updated documents:

Closing After February 1st- Deadline for requiring 2013 W-2s

Closing After April 15th- Deadline for requiring 2013 tax returns

You may be able to get away with extra time if you have been granted an extension to file your taxes later and can document the extension to the underwriter.  Also, if your tax returns show that you owe the IRS money, the underwriter will most likely request documentation showing that you have paid your taxes for 2013 or you have set up a payment plan.

Don’t Procrastinate

Funny Confession Ecard: I'm very busy doing things I don't need to do in order to avoid doing anything I'm actually supposed to be doing.

Source

Buying a home can be stressful enough without the added pressure of looming tax deadlines.  And, I’m here to warn you that if you are usually the type who procrastinates when it comes to filing or paying your taxes, don’t do it if you are planning on buying a home this year.  Mortgage loan underwriters must review your taxes and to make sure they have been filed and any money owed paid.  One of the reasons is that if you fail to pay your taxes, Uncle Sam can place a lien on your property.

How I Am Preparing My Borrowers

To make sure all of my borrowers are prepared, I just reached out to those who are currently pre-approved and searching for homes in Virginia to remind them to provide me with their 2013 W-2’s when they arrive and also to file their taxes on time.  As good ol’ Ben Franklin taught us, “An ounce of prevention is worth a pound of cure.”  Making sure my clients are always informed and prepared for each step and possible complication during the mortgage process is essential to making sure the process goes as smoothly as possible.

If you live in Richmond VA and need a recommendation for an accountant to file your taxes, or if you live in Virginia and have questions about a home purchase or refinance, feel free to contact me.  Also, I work with the best realtors in Richmond Va and would be happy to chat with you, find out your needs, and recommend one who I think would best help you find the right home for the best price.

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