Make the Tax Man happy with LESS!

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on Taxes

For many, tax season has them seeing red.  Work all year and then write a check to the IRS after you have see 15% to 20% of every check go to taxes.

Oh sure, those taxes from each check went to Social Security, Unemployments, the State(Income Tax) and the Federal goverment(Income Tax).   Yet, frequently, a check must be written to the IRS due to taxes owed.

No doubt, the payment of taxes isn't a problem for many as we all know it cost to have a standing army, good roads, education system and so much more.  It just seems salt in the wound to have to

write a check after filing one's taxes.

Fortunately, the attached Homeowner's Guide to Taxes(courtesy of HouseLogic) can help you ensure you take all the legal above board deductions possible.   These all relate to home ownership so you must own your residence to benefit.

If you are renting, you can look at this post as a motivation to buy a home so you can benefit from all home ownership has to offer!  Lower taxes is actually the least of the best reasons to own a home!

Here is the link:

Home Owners Guide to Taxes

It is that time of year.               Though still prepping for Christmas                             We must prepare for the Tax Man that Cometh!! This article from Al Clarks HomeActions Update is very timely. Please read and act to ensure the best tax advantage possible come April 2014!!! SIX YEAR-END TAX TIPS FOR HOMEOWNERS

Six Ways To Trim Your 2013 Taxes No one wants to pay more taxes than they have to, so use these six strategies to lower the size of the check you send Uncle Sam next April: 1. Pay Bills Early If you itemize, pay bills early to increase your deductions. Pay your January 2014 mortgage payment and your 2014 property taxes in December 2013. If you're a joint filer and don't have $12,200 in qualifying expenses ($6,100 for single filers) to make itemizing deductions worthwhile, don't prepay your expenses. Save your payments until 2014 when you may be able to take the deductions. Before you make any early payments, use the Internal Revenue Service's Alternative Minimum Tax (AMT) Assistant to make sure you're not subject to AMT. If you're subject to AMT, you can lose some deductions, so you wouldn't benefit from paying items early. 2. Make Home Energy-Efficiency Upgrades Pay for home energy-efficiency upgrades before Dec. 31 to take advantage of a federal tax credit for projects like installing insulation and energy-saving furnaces or air conditioners. This tax credit disappears when 2013 ends, so don't delay. 3. Recycle When You Remodel  When you remodel, do it in a way that keeps intact the fixtures and house parts you remove including cabinets, bathtubs, wood floors, windows and doors. Donate them to a salvage store, like Habitat for Humanity's Restore to earn a tax deduction. 4. Spend FSA Funds On Home Improvements Have funds left in your Flexible Spending Accounts (FSA)? You can spend them to make medically necessary home improvements, such as a hand rail in your bathroom. Get a letter from your doctor supporting your medical need for the improvements. Many employers have adopted grace periods giving you until March 15, 2014 to spend your FSA funds. 5. Deduct Property Taxes Paid At Closing If you bought your home in 2013, check your HUD-1 settlement statement (lines 106 and 107) to see if you reimbursed the sellers for property taxes they paid. You won't get a 1098 from your lender showing those taxes because you paid them at settlement not from your escrow account. 6.  Take The Home Office Deduction If you have a home office, but haven't taken the home office deduction because it's too complicated or you're worried it would cause you to be audited, go ahead and take it on your 2013 taxes. Starting this year, you can take a new home office standard deduction of $5 per square foot (up to 300 square feet) if you itemize deductions. You won't have a home depreciation deduction or later recapture of depreciation for the years you use this simplified option.

What You Might Lose with Tax Reform

With the "blank slate" effort to re-write the tax code, certain deductions that the "average" tax payer use regularly are possible casualties.

Without knowing the details of the plan until it becomes public, it is hard to know if the new simple rates structure under discussion would equalize the lost of these deductions for the average person.

Only time will tell.    

WHAT’S IN IT FOR ME?

Topic Summary: What Homeowners May Be Faced With Loosing or Having Reduced  Since 1913, Homeowners have been given preferential treatment. For 100 years, interest on the mortgage has been a favored tax break. It is also one of the costliest tax breaks. It is under fire to be eliminated over time or at least reduced in value. Here is a quick list of some popular tax breaks we homeowners enjoy. 1. Mortgage Interest Interest that you pay on your mortgage is tax deductible, within certain limits. Married taxpayers can deduct all your interest payments on up to  $1 million in mortgage debt secured by a first or second home. The average homeowner using this deduction reduces their taxable income by about $12,000. Americans save around $80 million every year by deducting mortgage interest on their tax returns. 2. Capital Gains Exclusion Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. 3. Home Equity Loan Interest.  If you borrow money against your home you can deduct the interest paid (within certain limits) 4. Property Taxes. Homeowners at certain levels of income can deduct from their taxable income, local property taxes paid on their home. 5. Energy Efficiency Upgrades/Repairs Deduction Homeowners can deduct the cost of the building materials used for energy efficiency upgrades to their home. This is actually a tax credit, one which is applied as a direct reduction of how much tax you owe, not just a reduction in your taxable income. 6. Loan Forgiveness Deduction: For homeowners who had a mortgage work out or short sale, Congress added in some breaks in 2007. Up to that point the money you saved form the work-out was considered income and taxable. The Debt Forgiveness Act temporarily relieved the taxpayer of that burden. The provision is still active. Source: Al Clark's Home Action

Another timely note from Al Clark!!!  


As you know handling your taxes is key!!  Perhaps you believe as I do, I am very willing to pay the taxes I owe the government for the services provided(not going to debate where we might pay for what reason we don't know).  Yet, I don't want to pay more than is required under the current tax code.   


Thus, any helpful information, I will always pass on!!!  Know you can come here and always find something useful for your day.

AX SERIES CONTINUED- DOING ANY WORK FROM HOME?

Work From Home? Consider the Home Office Deduction Tip Sheet on free filing assistance and cautions. Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction.  Here are six things the IRS wants you to know about the Home Office deduction 1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: as your principal place of business, or as a place to meet or deal with patients, clients or customers in the normal course of your business, or in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home. 2. For certain storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively. 3. Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses. 4. There are special rules for qualified daycare providers and for persons storing business inventory or product samples. 5. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home to figure your home office deduction and report those deductions on line 30 of Form 1040 Schedule C, Profit or Loss From Business. 6. If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be for the convenience of your employer. For more information see IRS Publication 587, Business Use of Your Home, available at http://www.IRS.gov or by calling 800-TAX-FORM (800-829-3676). Links: Publication 587, Business Use of Your Home (PDF 214K) Form 8829, Expenses for Business Use of Your Home (PDF 64K) Form 8829 Instructions (PDF 29K) Schedule C, Profit or Loss from Business (PDF 111K) Schedule A, Itemized Deductions (PDF)