The IRS Deductions Blog

Archive for February, 2010

Question: If I choose to have more taxes taken out of my paycheck now, am I definitely entitled to that $$ when I file?

I didn’t really know how to fill out the worksheet when I hired on at my new job. My friend here makes the same rate as I do, but more taxes are withheld for me. I get about $300 taken out of a $1200 paycheck. I think I chose to have more taxes taken out now, so I will get a larger return – versus having less taken out now, and getting a smaller return. Can anyone share their knowledge on the subject? I’m getting lost in all the “Itemized Deductions“, etc. as I research and I need some help. I would appreciate any good links as well! Thank you!

Answer: Your annual tax return is where you and the IRS settle up for the year. You calculate how much you should have paid in for the year, and then whoever owes whom pays up. If you overpaid, you get a refund from the IRS. If you underpaid, you write the IRS a check.

Many people treat their refund as “found money”. I personally hate to get a refund, because it means I lent money interest-free to the government. I much rather write them a check in April, because it means I borrowed money from the government all year. And as long as you don’t owe more than $1,000 there is no interest or penalty involved.

Items on Amazon Right Now for Itemized Deductions Worksheet:

Using Sales Taxes to Trim Your tax Bill

Filers who claim the standard deduction get the chance on 2009 returns to write off sales taxes on a new vehicle purchase. And some taxpayers who itemize could find themselves getting an additional sales tax deduction this filing season.

UNBOXING THE SEAGATE 500 GB EXTERNAL HARD DRIVE !

Question: Are other mortgage purchasing fees deductions?

Trying to find out if there are any other fees, related to the purchase of a home, that could be claimed on my Itemized Deductions. I am a first time home buyer, but was 45 days too early. Because of the loan I have I don’t have mortage insurance premiums either

So that leaves property taxes and my mortgage interest, which when added up dont exceed my standard deduction. I also had to pay several other misc fees during the purchasing process including an application fee, a lockin fee, an origination fee (1% earnest money I guess its called also, which went to escrow) and at least one other

Are any of these consider tax deductible also? Especially the origination fee. Also I know I should get a 1098 from my credit union (they handle my mortage) but should I be receiving something from my escrow place as well for the portion paid to them?

Thanks

Answer: Yes and no. If you paid any pre-paid interest, usually referred to as ‘points’, that money is deductible as mortgage interest.

Application fees, documentation fees, credit check fees, lawyers fees, any fees related to getting the mortgage, are not deductible. Instead, they become part of the cost basis of the property, which is used to determine profit, if any, after a future sale.

Let’s say you paid $100K for the house and $1500 in acquisition expenses that are not tax-Deductible Interest. Your basis in the property is $101,500.

The only exception would be if the fees were necessary in getting a mortgage related to a job-based move. Then, these expenses may be deductible as moving expenses. Only a qualified tax expert can determine this for you.

Items on Amazon Right Now for Tax Deduction Loan Origination Fee:

Congress posts reconciliation bill

UPDATED: The 153-page bill makes a number of changes to the Senate bill. The highlights: —Increases the tax credits for middle-income families who buy insurance. —Reduces the penalty for not buying insurance from $750 to $695. But the bill also requires some people to pay a share of their income as a penalty and that number was raised from 2 percent to 2.5 percent. —It closes the gap in Medicare …

Items on Amazon Right Now for Taxi Driver Tax Deductions:

Thai police seize internet chat logs

PHUKET: More than 20 police from the Economic and Cyber-Crimes Division (ECOTEC) have raided the offices of Thai state-owned telecommunications company CAT Telecom and confiscated chat-room conversati…

EEP100 – Lecture 16

Question: Can I deduct the mortgage, maintenance etc. on a rental?

I own a florida condo. I would lilke to rent it out approx. 6-8 months a year. What kind of deductions can I expect? For example can I deduct the price of cleaning fixing and painting after the tenent moves? How about the reimbursement for upgrades, a new appliance etc.? Is any of the taxes or mortgage deductible?

Answer: You can deduct all expenses directly related to your rental property, even if it is not being rented. It must be available for rent tho. So if one moves out, any expenses you incur in getting it ready for the next one are deductible, which include cleaning, repairs, rental agency fees. The mortgage interest, RE taxes and insurance too. The appliances can be dedcutible at 100% (Sec 179) but will depend on your income. Otherwise you will need to depreciate in over time. The cost of the property can also be depreciated over 27.5 years. Most tax computer programs can help you with these calculations.
One issue will be what you do with the property the other months that you are not renting it out. If you are living there, then your rental property will have limitations. Consult a tax accountant for more details.

Items on Amazon Right Now for Are Appliances Tax Deductible:

Breathing Device for Coal Miners Recalled

A belt-worn breathing device that coal miners count on to save their lives during fires and other accidents is being recalled because of a problem with the oxygen starter.

Newly renovated 1BR in elev coop bldg in Park Slope $375,000

Question: what can I itemize on my tax return?

I spent over 20,000 in home improvements. Things like a new pellet stove, new floors, new window treatments, paint, new sliding glass doors, new deck, all work was done ourselves. We purchased a new car but not one of the alternate fuel vehicles (2008 ford focus) can I use the tax payed on the car purchase? What else can I use as an itemized deduction? I know for sure I can use my real estate taxes and my mortgage interest, but what about my school taxes? hot water heater? refrigerator? gas (not for work) gas (for work travel out of state)?park pass? sales tax on food, clothing, home cleaners…? and last,if my husband gets a per-Diem in his check can he use his work expenses as write offs (hotel rooms, clothes, gas, food)?

I thank you so so much if any one can help with this.

Answer: You can only claim a insulation deduction (new windows, weather striping, storm doors) up to $1000. You can’t claim the tax on the car you purchased.

I would say you need to talk to an accountant because you don’t want to claim something wrong and the IRS audit you and charge you interest and penalties for stuff done wrong.

Items on Amazon Right Now for Sales Tax Deduction Vehicle Purchases:

Tax Tip — Nine facts about the New Vehicle and Excise Tax Deduction

Here are nine important facts the IRS wants you to know about the new vehicle and excise tax deduction

2010 Tesla Roadster UK-Version