Start the Countdown Homeownership comes with a number of new tax considerations. Fuse/ThinkStock The joys of homeownership are manifold. You can nail whatever you want to the wall! You can paint a room neon green! You can be financially responsible for an alarming mortgage, personally responsible for house liability issues and emotionally responsible for how sad you get in the summer when all the neighbors around you mow their lawns while you had no intention of getting out there for another week. Some parts of homeownership are more fun than others. But don't assume that trying to navigate tax code as a homeowner is a nightmare. There are a lot of great perks for people who own homes, and we're here to help you find them. From your mortgage to your home insurance -- not to mention the intricacies of selling and buying -- let's dive into some simple tips that can help elucidate a few points come tax time. 10: Mortgage Interest When it comes to taxes, the eternal question … [Read more...] about 10 Tax Tips for Homeowners
Federal real estate tax credit
A rental property may seem like a great to make extra money, but it will come with a number of new tax considerations. iStockphoto/ThinkStock Perhaps it's when you see that cute little bungalow next door with a "For Sale" shingle hanging outside. Maybe when you're looking at your bank statements and frowning about your own mortgage payment. Or maybe it's when you sigh with satisfaction after fixing your own leaking sink and think to yourself, "I could totally be a landlord – fix sinks all day and feel endlessly smug." Whatever the reason, many of us have had pleasant, idealistic daydreams about owning rental property. We'd just buy this nice house, get some nice people in there, and collect a nice paycheck every month! Of course, the reality is a little less romantic. You have to pay a sizable chunk of taxes on that nice paycheck, and there are several rules about what goes where. For instance, if your tenant pays you for January rent in December, count it toward the … [Read more...] about Can you get tax deductions if you own a rental property?
Farm buildings stand near a corn field in Lincolnshire, Ill. Real property like this contribute to the size of a property tax bill. Tim Boyle/Getty Images Taxes, as unpleasant as they may be, are how governments pay for public programs and services. Most everyone in the United States is familiar with federal and state income tax. But if you've never owned real estate or your own business, you may not know how real estate property taxes work. In medieval Europe, property taxes were based on the size of a piece of land. Generally speaking, the larger the piece of land was, the higher the real estate property tax was. It wasn't until much later that the value of land came to be seen as the land's ability to output goods and services, and thereby create profit for its owner. Tax assessors began examining other property on the land, including structures, farming equipment and livestock. Why? Governments figured, for example, that if Lord Garish had 1,000 cows, three stables housing … [Read more...] about How Real Estate Property Taxes Work
If you itemize your deductions, you can include qualifying charitable donations, including nonmonetary donations. LuminaStock/iStockphoto/ThinkStock Charitable tax deductions are the IRS's way of rewarding you for making donations to organizations that help people in need. For every contribution you make (cash or otherwise) to a qualified charity, you can shave a little (or a lot) off your adjusted gross income and reduce your own tax burden. Charitable contributions can take many forms. Cash, check and credit card donations are the most straightforward type of donation -- they're easy write-offs. But you can also donate property, goods, real estate, your time and services, stock options, intellectual property and just about anything else you can think of. This is where things take a turn into more complicated territory. Some of it will be fully deductible, some partially, some not deductible at all. The answers are all to be found in the IRS publications on charitable … [Read more...] about How Charitable Tax Deductions Work
Could bad credit ruin your dreams of home ownership? See more real estate pictures. Peter Cade/Iconica/Getty Images Well, the short answer is yes, but there's a lot more to it. Whereas a few years ago you could get a subprime loan without much trouble, the mortgage mess has led to a lot more caution in the way home loans are approved these days. If your credit needs work, there are still some things you can do to maximize your chances of getting a loan, but you should really ask yourself some hard questions before you put much effort into finding out what loan options are available to you. Is Buying a Home a Good Idea for You? It's true that circumstances have changed a lot in the last few years, and new loan limitations are making it hard for people to get in over their heads, but at some point you have to ask yourself, in light of the things in your credit report, can you handle the pressures of owning a home right now? To qualify, you may have to accumulate a large down … [Read more...] about Can you buy your first home with bad credit?