Category: Taxes

Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners

January 21, 2021 /

last minute tax tips for home ownerskroach/iStock

It’s heeeere: tax time.

Granted, this year, the coronavirus pandemic prompted the Internal Revenue Service to extend the usual April 15 deadline to July 15. That might have seemed like plenty of time—and yet here we are, with a mere two weeks to go and a filing window that’s closing fast.

We get it. Maybe you’re a procrastinator. Or maybe you’re a homeowner who, rather than taking the easy-peasy standard deduction, generally tries to save a bundle by itemizing your deductions instead.

Whatever your reason, if you’ve put off filing your taxes until now, don’t panic! You still have options.

Here are three last-minute tax tips for homeowners that could save you plenty of money, headaches, and more.

Tip No. 1: Grab Form 1098

Form 1098, or the Mortgage Interest Statement, is sort of like your home’s W-2: a one-stop shop for your possibly two biggest tax breaks.

  • Mortgage interest: “The biggest real estate tax deduction for most people will be the interest on their home loan,” according to Patrick O’Connor of O’Connor and Associates. Single people can deduct the full interest up to $500,000; for married couples filing jointly, the limit is $1 million if you purchased a house before Dec. 15, 2017. If you bought a home after that date, you will be allowed to deduct the interest on no more than $750,000 of acquisition debt—that’s a loan used to buy, build, or improve a main or secondary home. (Here’s more on how your mortgage interest deduction can help you save on taxes.)
  • Property taxes: This is the second-biggest deduction for most homeowners. Just remember the total amount you can deduct is $10,000, even if you pay way more—and that includes state and local income tax, property tax, and sales tax. (Here’s how to calculate your property taxes.)

You might be eligible for other real estate–related deductions and tax credits, but these are the biggies for most people. If you’re down to the wire on filing, you might just deduct these two and call it a day.

Just remember to make it worth your while. These numbers need to add up to more than the current standard deduction, which jumped to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly.

Tip No. 2: File an extension

If you still need more time to get your taxes together, it’s totally simple and penalty-free to file for an extension until Oct. 15. But don’t get too excited; the IRS still requires you to pay your estimated tax bill by July 15, or else you’ll pay interest on what you owe down the road.

The IRS makes it easy to file for an extension, either online or by mail. On the form, just estimate how much tax you owe. If you’re filing an extension because you need more time to figure out your itemized deductions, one easy shortcut is to just take the standard deduction now—or the same amount you claimed last year. All in all, it’s better to overestimate what you owe, because then you won’t pay any interest. Once you file for real, anything you’ve overpaid will come back to you.

But what if you need an extension because you can’t pay your tax bill? It’s still better to file for an extension with fuzzy numbers than to not file at all.

The IRS has payment plans that can help if you are short on cash. Just file something—blowing the deadline entirely will open you up to penalties as well as interest on your bill. And maybe an audit, too.

Tip No. 3: Hire some help

If you make less than $69,000 a year, you qualify to use free tax prep software from the IRS. Even if you make more than that, there are lots of free or low-cost online tax prep options that should work for anyone with relatively straightforward taxes.

Of course, another option is to find yourself a good accountant.

If paying for a tax preparer sounds extravagant, keep in mind that, according to the U.S. Tax Center, the average cost of getting your taxes done is only $225. This, generally speaking, is money well-spent.

A good accountant can actually save you money by spotting deductions you might not have found on your own, and helping you plan to minimize the next year’s taxes. All in all, that may add up to the best few hundred bucks you’ve ever spent!

Another timesaver: Rather than snail-mailing your accountant your tax forms, snap pictures of them on your smartphone; some apps like CamScanner can do so with scanner-style quality. Accountants don’t need the originals to file.

For next year, remember to prepare

OK, so this year you waited too long and stressed yourself out. If you don’t want a repeat ordeal next year, now is also the time to mend your ways and start tax prep early. Nobody wants to be thinking about taxes all year, of course. But as a homeowner, you can do some things to be better prepared.

So before you do any home maintenance, upgrades, or renovations, research whether there are any tax deductions you could be eligible for.

Start now, and you’ll be sitting pretty to collect on all the various tax perks that come with owning a home rather than pulling out your hair at the last minute.

The post Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

Still Waiting on Your Second Stimulus Check? Here’s How to Track It

January 7, 2021 /

The second stimulus check started hitting bank accounts last week.

That means many people who have direct deposit are waking up to find an extra $600 in their bank accounts if they’re single or $1,200 if they’re married, plus a $600 coronavirus credit for each dependent child 16 or younger.

But what if your second check hasn’t arrived? There’s a new way to find out when it’s coming.

Where’s My Second Stimulus Check?

The IRS released an updated version of the Get My Payment application on its website Monday, Jan. 4, that allows you to track your second stimulus check. You can use it on your computer, phone or tablet.

Here’s all of our coverage of the coronavirus outbreak, which we will be updating every day.

Click on the link, and then click the blue “Get My Payment” button. Don’t be surprised if you have to wait a couple minutes to get through. This corner of IRS.gov is getting a lot of traffic right now, because people really want to know when they’re getting their $600 stimulus check. When you do get through, you’ll get a warning that the system is for authorized use only. Click “OK.”

Next you’ll need to enter your Social Security number or Individual Tax ID number, date of birth, street address and ZIP code.

Once you submit your information, the website will tell you the date your payment is scheduled to be made and whether it will be by check or direct deposit. If it’s scheduled for direct deposit, it will tell you the last four numbers of the bank account it will be deposited into.

You can also use the tool to provide your bank account and routing numbers. If the IRS can’t pay you via direct deposit, you’ll get one via paper check or prepaid debit card. The first paper checks were sent last Wednesday, Dec. 30.

What if Something Is Wrong With My Payment?

What if you haven’t gotten the payment that should have been deposited already? Or what if your payment isn’t scheduled, or the wrong amount has been deposited? Check this FAQ page, but don’t bother trying to call the IRS right now.

If your payment hasn’t been made by Jan. 15, you’ll need to submit a tax return and get it in the form of a rebate recovery credit. The same applies if you were eligible for the first round of checks but didn’t received one, or if you got the wrong amount.

Payment status not available? Here’s what that means, plus a few hacks that worked in the first round.

Your coronavirus stimulus check is not taxable — so however you plan to spend that money, just know that you don’t need to save any of it for Uncle Sam.

Robin Hartill is a senior editor at The Penny Hoarder and a certified financial planner. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

3 Tips for Doing Your Due Diligence Right

January 7, 2021 /

If you’ve purchased commercial real estate, then you understand the importance of due diligence, a critical stage in the acquisition process. Due diligence is a…

The post 3 Tips for Doing Your Due Diligence Right first appeared on Century 21®.

Source: century21.com

8 Ways You Could Get Stimulus Money With Your 2020 Tax Refund

January 6, 2021 /

But if you reduced your 2020 taxable income to ,000 by contributing an extra ,000 to your 401(k) or traditional IRA (sorry, a Roth IRA won’t work), you’d get the additional 0 coronavirus payment from both rounds, so 0 total.
That means if you’re in a mixed-status household, you could get a ,200 credit for yourself, plus 0 for each dependent child 16 and younger who has a Social Security number.
If your coronavirus checks are long gone, you could have more stimulus money coming your way, even if Congress doesn’t do another thing. And if you didn’t qualify for a check based on your past tax return, you could get stimulus money if you file a tax return for 2020 that shows you’re eligible.

8 Reasons You Could Get Stimulus Money With Your 2020 Refund

A lot of people will no doubt have a lot less income to report in 2020 than they did in 2018 or 2019. If you didn’t qualify for the first check because your previous income was above the ,000 threshold for singles or 8,000 for married couples, you could qualify based on your 2020 income. The second check has a lower phaseout because it’s smaller, so you won’t receive one if you’re single with an income above ,000 or married with an income above 4,000.

1. You’re No Longer Claimed as a Dependent

If one or more of these scenarios apply, you might get more coronavirus money in 2021 by submitting a tax return. And relax: You won’t owe more at tax time or get a smaller refund as the result of receiving a check.
If you had a child in 2019 but got a late start on filing your 2019 return due to the coronavirus tax extension or you filed on paper, the IRS probably processed your first payment using your 2018 return. You’ll get the extra 0 child credit next year when your 2020 return is accepted. But provided that your 2019 return has been accepted, you may receive 0 for your child from the latest round with your second stimulus check.

2. You Had a Child in 2020

The Washington Post’s Michelle Singletary reported on this odd quirk of stimulus payments: It appears that in situations where divorced, separated and never-married parents take turns claiming their dependent children on taxes, each parent could wind up with a 0 payment.

3. Your Child Was Born in 2019, but You Took Advantage of the Tax Extension

Source: thepennyhoarder.com

4. You Get Social Security or SSI Benefits and Have a Dependent Child

Likewise, if your payment was reduced because your income was above ,000 if you’re single or 0,000 if you’re married, you’d get the difference when you file your 2020 return.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.
The IRS automatically processed coronavirus checks for people who aren’t required to file a tax return and receive Social Security, Railroad Retirement, SSDI, SSI or VA benefits.

5. Your Income Dropped in 2020

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If you have a Social Security number but you’re married and file a joint tax return with someone who doesn’t have one, neither of you initially qualified for a stimulus check under the CARES Act. But the latest relief bill changes the rules so that anyone in the household with a Social Security number will qualify for the second payment — and it also makes the change retroactive to the first round.

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6. You and Your Child’s Other Parent Take Turns Claiming Them for Taxes

The parents of any bundle of joy who arrives in 2020 will be eligible for an ,100 child coronavirus credit: 0 from the first round and 0 from the second. They’ll have to wait until they file their 2020 tax return, since the IRS doesn’t have record of these new additions yet.
Generally, you can be claimed as a dependent if you’re under 19, or you’re under 24 and a student, if your parents provide at least half of your support.

7. You Increased Your Retirement Contributions in 2020

Attention, Class of 2020: If your parents or someone else claimed you as a dependent in 2019 but they don’t in 2020, you could get an ,800 credit — ,200 from the first check and 0 from the second one — provided that you file a tax return.
But in many of these situations, the IRS only received the information needed to send the recipient the ,200. They didn’t get information about dependent children who qualified for 0 coronavirus child credits unless the recipient provided it using the non-filer tool on the IRS website within a pretty narrow timeframe.

8. You’re Married to Someone Without a Social Security Number

If you got a ,200 payment for yourself but didn’t receive the extra payments for dependent children under 17, you’ll need to file a 2020 tax return to get the extra 0, even if you don’t normally need to file. The same applies if you don’t get the 0 credit with your payment in the latest round.
Whoever claimed the child for 2019 probably received both the 0 and 0 payments with their stimulus check. But since the payments are technically a credit for 2020 taxes, there could be a loophole that allows the other parent to get the credit for the same child when they file next year.
Here’s why: Both the first stimulus check and the second stimulus check are an advance on a temporary 2020 tax credit. But because of the urgency of the situation, the IRS was directed to get us that money ASAP, using information from our 2018 or 2019 returns.
That means if your tax situation changed through the course of the year, you could get stimulus money if your 2020 return shows that you’re eligible.
Suppose you’re a single filer who earned ,000 in 2019 and your income stays the same in 2020. You would have gotten a 0 coronavirus check in the first round, because payments are reduced by 5 cents for every of income over ,000 if you’re single. In the second round, you’d get 0.