Homeowners: Are you ready for tax time?
While there’s still time left to file your taxes, the clock is ticking if you haven’t. It’s pretty well understood that tax time is a season of dread for many Americans, homeowners or otherwise. Whether you consider tax time a breeze, a hassle or one big ball of confusion, every homeowner needs to be well informed as to how their home, and the expenses they pay on it, factor into their tax bill.
HSH.com staff writer Gina Pogol compiled the 10 frequently-asked questions regarding homeowners and their taxes.
Thinking About Walking Away? Consider the Tax Hit
We’ve touched on the moral hazard that’s involved in walking away from your mortgage, but this post is designed to warn you of the tax liabilities that can incur after you walk away (a.k.a. letting your home fall into foreclosure even though you can still afford to make payments) from your home:
“I had no clue this would happen,” says [Maxine] McDaniel [who walked away from her Colorado home earlier this year]. “I just thought I’d get out from under the house and that would be that,” she says.
Uncle Sam will want your tax cut back
Or some of it, at least. An Associated Press article warns that the extra $40 or so that you’re now seeing in your paycheck under President Obama’s “Making Work Pay” tax credit may boost the amount of money you owe Uncle Sam:
The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.
April Fools comes early for smokers
If you smoke, you probably know that the Federal government is poised to raise the tax on a pack of cigarettes on April 1 by 62 cents, raising Uncle Sam’s take to $1.01 per pack.
But if you were thinking about buying a few cartons ahead of time to beat the tax hike, it’s too late now:
Smokers who were preparing to take a hit to their wallets next month are learning to their surprise that the era of nearly $5-per-pack cigarettes arrived early.
Dolans: 11 Little-Known Tax Deductions
Times are tough, money is tight and the holiday season is upon us once again. Believe it or not, it’s time to once again begin thinking about everyone’s other favorite time of the year — tax season. Now we know tax time is far from your favorite time of the year, but with the Dolan’s “11 Little-Known Tax Deductions,” you may be able to deduct far more than you ever thought, making tax-return time a kind of “second Christmas:”
Pleasure Trips: “You don’t have to spend your entire trip working, but if you can document that you actually made some business contacts or did a little research relevant to your business while you were away, you can enjoy some tax bennies from the trip.”
