Social Security: know the variables … run your math
Social Security: know the variables … run your math
When to start taking Social Security Benefits is anything but simple. So where does one start? Start by understanding the key variables that can impact the amount you receive. Here are some of the keys.
The Coverdell ESA Savings. Lost in the mix?
The Coverdell ESA Savings. Lost in the mix?
Is this long standing tax advantaged education saving account worth the hassle? Perhaps. Here are some things to consider.
Lifestyle Audits. A thing of the past?
Lifestyle Audits. A thing of the past?
In the past if the IRS thought your lifestyle could not be supported by the income reported on your tax return, they could audit you. Is this practice now a thing of the past?
Understanding Tax Terms: Depreciation Recapture
Understanding Tax Terms: Depreciation Recapture
Too many taxpayers using a home office or having rental property are surprised by their tax bill when they sell their property. A little understood area of the tax code called depreciation recapture is often the culprit.
IRS Takes Steps to Reduce Fraud
IRS Takes Steps to Reduce Fraud
The IRS is now taking additional steps to combat the rapid increase in taxpayer identity theft. Here is what you need to know about what is happening now.
Non-taxable Income for Those in the Armed Services
Non-taxable Income for Those in the Armed Services
There are special tax benefits to members of the U.S. Armed Forces. If you or someone you know is in the military, prior to filing a tax return it makes sense to review your situation. Outlined here are some of the more common items that may be excluded from your taxable income.
College Tax Savings: 2014 Edition
College Tax Savings: 2014 Edition – Every little break helps
College move in day is just around the corner. While you consider how to pay for this tremendous expense, do not forget to account for the best tax breaks possible. Here are some of the more common educational tax breaks for those in college.
Understanding Tax Terms: Basis – Covering the bases on basis
Understanding Tax Terms: Basis – Covering the bases on basis
This commonly used tax term is anything but common to most of us. Knowing the basics of basis can serve to lower your tax obligation when you sell property.
Social Security tax problems
Beware the Tax Torpedo – Large retirement account balances can cause Social Security tax problems
A big surprise can occur when you see your Social Security Retirement Benefits being subject to income tax. This “tax torpedo” is often triggered by Retirement Account distributions. Are you prepared for this?
Tax Benefits of Home Ownership
ow that home values are on the rise once more, it makes sense to review the tax benefits of home ownership.
As always, should you know of someone who may benefit from this information please feel free to forward this newsletter to them.
Tax Benefits of Home Ownership
When it comes to tax savings it really is home sweet home. Here are some of the popular tax benefits of owning your own home and how to get the most out of your home’s tax advantaged status.
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Mortgage interest. Interest paid on your home mortgage is still tax deductible. This deduction is taken on Schedule A as an itemized deduction. Certain upward limits apply. | |
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Property taxes. Property taxes paid on your home are also tax deductible as an itemized deduction. | |
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Home Equity. Most homeowners can take out a second mortgage on the “equity” in their home. In most cases, this interest expense is also tax deductible. Many use home equity loans for purchasing autos, boats, and the like since interest on traditional loans is not tax deductible.
Idea: Consolidate credit card debt within a home equity loan or home equity line of credit if your home is worth more than your outstanding mortgage balance. You have the double advantage of deducting the interest on your tax return PLUS you avoid the higher interest rate on your credit card. A word of caution however, if you default on a payment your house is now the collateral. |
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Capital Gains Exclusion. When you sell your home, up to $500,000 for joint filers ($250,000 for single taxpayers) of the increased value over what you paid for the home can be excluded from tax. To take advantage of this capital gains exclusion you must make the home your principal residence in two of the last five years. | |
| Idea: The capital gain exclusion on home sale can be used more than once. For example, you could sell your qualified main home and take the exclusion. If you then made a second (vacation) home your new main home you could also take the gain exclusion once again. You would need to meet the IRS ownership and use rules to qualify. Special allocation rules might apply if this second home was also rental property. | ||
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Second home benefits. A second home (cabin or vacation home) can also benefit from interest and property tax deductibility as long as total mortgages do not exceed certain limits. | |
Should you have any questions regarding your situation please feel free to call.