Tax issues to know every day of the year, not just April 15

Posted by Annalisa Burgos | April 15, 2009

Tags: , , , , , , , , ,

Judging by the lines at my post office this morning, a lot of people are waiting til the last minute to mail those tax returns. Kudos to those of you who have already received your tax refunds — April 15 is just another arbitrary date. If you’re a procrastinator like me, you’ve filed an extension so you can put it off for another day.

For homeowners, tax issues are always at the forefront of their minds, regardless of the date. Tax breaks are often touted as the biggest perk of owning a home, since you can deduct mortgage interest, property taxes and mortgage points for the year you buy.  This year, an $8,000 tax credit for first-time homebuyers is enticing more newbie buyers to come out of the woodwork.

Any real estate transaction has an effect on your tax situation. Whether you’re selling a home or transferring a home to a family member, research the tax implications first.

Perhaps the most contentious tax issue for homeowners is property taxes. Local governments rely heavily on real estate tax revenue to balance their budgets. Today, as home values plunge in many markets, homeowners are asking that their properties be reassessed and their taxes lowered to reflect that sharp loss in value. If you want to appeal your property tax, contact your  county assessor or the local government entity that handles real estate taxes in your area. Be wary of companies that claim they can get your property tax lowered if you pay them a fee. Oftentimes, you can start the appeal process yourself.

But don’t be too hopeful. It’s a recession and many cities are coming up short on their budgets. So even if you do appeal, they may simply increase the tax levy in order to get the same amount from you.

If you’re buying a home, do yourself a favor and estimate your property taxes yourself. Real estate listings show what the current homeowner pays, but oftentimes, the property is reassessed when a new owner takes over. Do the research so you aren’t unpleasantly surprised.

For more helpful tax tips, go to http://www.frontdoor.com/home-finance/FrontDoors-Top-10-Tax-Tips/54900. And remember to always consult your tax professional before taking any action.

Comments are closed.