Cola Tax & Solutions
This article highlights the benefits of a mortgage. Now is a great time to buy a home, the housing market is at a low which means the value will be higher in time. Owning a home is not only a great investment, but is the best income tax deduction for individuals. Mortgage interest paid is deducted right off the AGI. The IRS cuts even more slack to those without a 20% down payment, by allowing private mortgage insurance premiums to be a tax deduction. The benefits of owning a home do not stop with income tax breaks. Monthly payments toward a mortgage slowing gain equity, so in a way a small percentage of the mortgage payment is refunded back at the time the house sells. On top of the equity, the market value may increase as well. The average during a stable market is 4% per year. Some markets today are stable and still growing, while others are declining. Between the two, selling your home could make you a big profit and if done carefully, can avoid capital gains tax all together. To avoid capital gains tax the owner must have lived in the property, as a primary residence, for more than 2 years in the past 5 years. Without a down payment of 20% most people become discouraged. This should not be the case, a credit score greater than 620 allows for PMI, Private Mortgage Insurance, again tax deductible. Another option is a FHA, Federal Housing Authority, loan which is allowing many people right now to obtain a mortgage, and to buy there first piece of real estate. FHA loans are becoming ever more popular. The best thing to do is pick up a phone and call a mortgage lender and see what type of loans they have available. The next step in becoming a homeowner, after choosing a loan type, is to contact a realtor. Also check BankRate.com regularly while looking for a home. A low mortgage rate could save you hundreds a year and thousands through out the life of the loan. For more information visit Cola Tax & Solutions
Monday, March 24, 2008
Reminder to file your income tax returns!!
In order to receive the economic tax relief package, that was proposed by president Bush, you must file a income tax return with the IRS. Just file your tax return and the IRS will take care of the rest and send you the check. So if you made more than $3,000 dollars in 2007 and weren't planning to file a tax return its time to rethink that and go ahead and file. Don't the let the government keep YOUR money!
Stimulus Tax Rebate Top 6 FAQ
Trying to help addressing all questions about the stimulus tax rebate.
1. It is officially signed into law so there are no more questions about that.
2. The rebate is based on your net tax. If you are wondering what that is and where to find it, well you came to the right place, since I am about to explain it all. To come to your net tax you must first subtract all your deductions and exemptions from your total income. This will leave you with your taxable income. Then figure your tax using either the tax table or through the formula provided by the IRS. That number plus any alternative minimum tax you have will equal your net tax. Your net tax is before any credits are applied such as the child tax credit or education credits. Those credits can reduce your net tax by thousands. Your net tax can be found on the 1040 line 46, 1040A line 28, or 1040EZ line 10.
3. So now you have your net tax figure. If you are single, and your net tax is less than $300 and your income is more than $3,000 in 2007 then you will get the minimum from the rebate which is $300. If your net tax is higher than $600 than you will get the maximum rebate of $600. If your net tax is higher than $300 but less than $600, then your rebate becomes the size of your net tax. Same general rules apply for couples. Couples with a net tax of less than $300, and making more than $3,000 in the year will get the minimum back for couple in the amount of $600. If the couple’s net tax is more than $1,200 then they will get the max rebate of $1,200. Any net tax amount between $600 and $1,200 will become the amount of the rebate.
4. Individuals and couples with dependents under the age of 17 are entitled to an extra $300 per qualifying child. This will excludes any dependent that is not a qualifying child of the tax payer and those qualifying children that are over the age of 17. So, anyone with dependent parents are out of luck on this bonus. Also anyone that can be claimed as a dependent on there 2007 tax return is not included in the rebate regardless if they made more than $3,000 or not.
5. The IRS has to process all 2007 tax returns before they can issue checks for this rebate. After the tax season ending on April 15th, the IRS plans to start cutting check by mid May time.
6. This money is a free bonus with nothing hidden. You will not have to pay income tax on it, and it will not be repaid with your 2008 return. It is truly free money for taxpayers.
1. It is officially signed into law so there are no more questions about that.
2. The rebate is based on your net tax. If you are wondering what that is and where to find it, well you came to the right place, since I am about to explain it all. To come to your net tax you must first subtract all your deductions and exemptions from your total income. This will leave you with your taxable income. Then figure your tax using either the tax table or through the formula provided by the IRS. That number plus any alternative minimum tax you have will equal your net tax. Your net tax is before any credits are applied such as the child tax credit or education credits. Those credits can reduce your net tax by thousands. Your net tax can be found on the 1040 line 46, 1040A line 28, or 1040EZ line 10.
3. So now you have your net tax figure. If you are single, and your net tax is less than $300 and your income is more than $3,000 in 2007 then you will get the minimum from the rebate which is $300. If your net tax is higher than $600 than you will get the maximum rebate of $600. If your net tax is higher than $300 but less than $600, then your rebate becomes the size of your net tax. Same general rules apply for couples. Couples with a net tax of less than $300, and making more than $3,000 in the year will get the minimum back for couple in the amount of $600. If the couple’s net tax is more than $1,200 then they will get the max rebate of $1,200. Any net tax amount between $600 and $1,200 will become the amount of the rebate.
4. Individuals and couples with dependents under the age of 17 are entitled to an extra $300 per qualifying child. This will excludes any dependent that is not a qualifying child of the tax payer and those qualifying children that are over the age of 17. So, anyone with dependent parents are out of luck on this bonus. Also anyone that can be claimed as a dependent on there 2007 tax return is not included in the rebate regardless if they made more than $3,000 or not.
5. The IRS has to process all 2007 tax returns before they can issue checks for this rebate. After the tax season ending on April 15th, the IRS plans to start cutting check by mid May time.
6. This money is a free bonus with nothing hidden. You will not have to pay income tax on it, and it will not be repaid with your 2008 return. It is truly free money for taxpayers.
IRA contributions will get you a bigger refund!
Individuals have until April 15th 2008 to make contributions to an IRA account and be able to deduct it from their 2007 tax return. The IRA contributions deduction has a limit of $4,000, for the 2007 tax year, for filers under the age of 50 (given your earned income was over $4,000). The limit increases to $5,000 for individuals over the age of 50. These contributions will reduce your taxable income and there for reduce your tax bill. In some cases they might actually make you fall into a lower tax bracket and save you even more.
If you haven’t started contributing to an IRA consider doing so. The short term tax relief is only one small benefit. The real benefit comes when you retire. It is a known fact that most American’s do not have enough funds in their retirement accounts. Please do not fall victim to that statistic and invest today.
For more finance related blogs please visit Cola Tax & Solutions
If you haven’t started contributing to an IRA consider doing so. The short term tax relief is only one small benefit. The real benefit comes when you retire. It is a known fact that most American’s do not have enough funds in their retirement accounts. Please do not fall victim to that statistic and invest today.
For more finance related blogs please visit Cola Tax & Solutions
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