The Confusion of Taxes
Owners of homes may appreciate an entire slew of various tax cuts, however let’s get straight to the point: The US government does not generally make it simple to gather. Truth be told, tax time for most citizens can be so annoyingly perplexing, many end up skipping out on availing the numerous tax deductions out there that they’re actually eligible for. And the IRS gets involved with even the most common of silly mistakes made by citizens.
Avoiding such unnecessary hassles can give you the much needed peace of mind you so deserve. Many people make the mistake of not knowing which year their tax is to be deducted for, as many authorities choose to deduct tax of the previous year in the current year. This can be confusing for many, as simple as it may sound, and can land you in trouble when you make an incorrect claim. Thankfully there are many multifamily Leasing Technology options available today to alleviate such annoyances.
If you are being funded by your lender using an escrow account, you cannot just go ahead and deduct the same in escrow according to the Vice President of TurboTax, San Diego. This is due to minor discrepancies between your actual property tax and escrow account payments, even though your lender is supposed to balance the two out on the final bill every year. For example, if you have a tax bill of a thousand dollars though your lender may have collected $100 more, irrespective of what is paid in escrow, only the thousand dollars can be deducted. The official statement given to you by the lender should reflect the same. You are also allowed to deduct the refinancing points paid to your lender as part of securing the mortgage for the year in which your home was purchased. The catch however, is that you can deduct points only over the span of your new loan, if you do decide to refinance. If $2,000 was paid in points towards refinance for a fifteen year mortgage, you will end up with a tax deduction of 133 dollars per year.
The home office deduction used to be an incredibly complex and intimidating procedure but that isn’t the case anymore, so if you do work from home, it will be well worth your while to apply for it. If you happen to be someone who purchased their home between the 8th of April, 2008 and the 1st of May, 2010, you might have chosen to receive the first time tax credit scheme for home buyers, which is a zero percent interest loan, which could work up to 7,500 dollars. This is to be paid over a 15 year period. In the event that the house is sold, you do still need to pay back the loan, though the process of figuring out how much is made easier by an IRS tool.
You might have to pay the capital gains tax on profits made beyond $250,000 per person or double that amount if you are filing jointly as a married couple, if you sold your home. Do make sure to not overestimate this amount though, keeping in mind this like home improvement deductions on the final amount. If any ‘green’ additions to your home were made, such as the installation of energy efficient doors and lights, you are eligible for a 10% tax credit, which can’t go over $500. So go ahead and enlist the help of such varied point breeze Real Estate options available today!