Taxes are what you pay to the federal, state and local governments where you live. Different types of taxes include income taxes, capital gains tax, sales tax, estate tax and real estate taxes such as property tax. Learn how to bequest property and do transactions in a way that will help you pay less taxes and follow the law.
New Tax Laws That Affect You in 2013
In January of this year, Congress passed the American Taxpayer Relief Act of 2012 (ATRA). It affects filing taxes for 2013. The good news is that couples earning less than $300,000 ($250,000 singles) won’t face many hits. But folks earning more than this threshold will be hit with substantially higher taxes. Let’s look at a [...]
How to Protect Your Property From Lawsuit
When thinking about how to protect your property from a lawsuit, you might want to consider setting up a trust. Q: I bought my house 20 years ago and today it is worth $300,000. I owe about $150,000 and have about 10 years left on a 15-year mortgage. The interest rate is 5.125 percent, and [...]
1031 Exchange: Investment Property Tax Exchange Questions
A 1031 exchange is an investment property exchange process that can assist in deferring taxes. We answer a question here. Q: I currently own two rental properties. The first house is paid off. The second property still has 14 years on the mortgage. I am considering selling the first house because it's not earning all [...]
Buying a Timeshare: Is a Timeshare a Good Idea?
If buying a timeshare, you should ask why a timeshare is a good idea. If you invest in timeshares you may have problems with selling in the future. Q: My wife and I are looking for more ways to reduce our taxable income. Is buying a timeshare these days a good idea and can it [...]
Make Gathering Your Tax Records Easier
Why does the gathering of tax records seem to be such a difficult and onerous task? One year, we had a client who simply could not get us the amount of her mortgage interest payment until the afternoon of October 15 —by which time our office was closed for tax season. The good news is [...]
Using a Quitclaim Deed to Avoid Taxes
A quitclaim deed conveying the title of a home to a living trust can result in a stepped up basis when selling the home, but if it is unrecorded it likely will not be of any help. Q: In response to your recent article about a father who transferred title in his home to his [...]
The Final Estimated Tax Payment for 2012
January 15 is the due date for the final payment on estimated 2012 IRS, state, and city income taxes. (You may have already paid the state in December to snag that extra deduction last year). Generally, if you’re going to owe more than $1,000 to the IRS on April 15, you’re going to be on [...]
Filing Taxes: Paperwork to Expect When Starting Your First Job
I recently received this question from a reader: “I’m 17 and I’m going to be getting my first job. What kind of tax forms do I need? Do I claim myself as a dependent?” A first job is pretty exciting. You start out feeling a little bit hesitant because you’re not entirely sure what to [...]
Do I Need to Repay my First-Time Home Buyer Tax Credit from 2008?
For those that took advantage of the first-time home buyer tax credit in 2008, you still need to repay the IRS back over time. Q: I bought a home in April, 2008 and took advantage of the $7,500 home buyer tax credit. My understanding is I will have to pay back the full amount to [...]
Documenting Your Charitable Tax Deductions
As we all know, it’s important to get the details right when you are filing taxes. When it comes to charitable contributions, it’s even more important. The Tax Code doesn’t just require the paperwork to show the amount donated, it requires you to get the receipts on time—and those receipts must clearly specify that you [...]