Taxes are what you pay to the federal, state and local governments where you live. Different types of taxes include income taxes, capital gains tax, sales tax, estate tax and real estate taxes such as property tax. Learn how to bequest property and do transactions in a way that will help you pay less taxes and follow the law.
Capital Gains Taxes On Farm Property
Even if your property is considered farm land, if you use the property as your primary residence, you are eligible to take the capital gains deduction. To take the deduction, you must have lived there as your primary residence for at least two of the past five years.
Roth IRAs And 401(k)s Differ In Taxes
What should you consider when you're debating between a Roth IRA and a 401(k) plan? A Roth IRA and 401(k) plan differ in when the money you invest gets taxed. With a Roth IRA you're investing after-tax dollars whereas you invest pre-tax dollars in a 401(k). Roth IRA earnings are tax-free whereas 401(k) money gets taxed when you withdraw it.
Investment Property Tax Deduction Requirements
Investment property may qualify for certain tax exemptions, but it must follow strict requirements. In general, if you live in a property for two out of the prior five years (the order of when you've lived there is not important), and the property was your primary residence for two years, you are entitled to exclude $250,000 of the gain in the sale of the home from any taxes. Contact a tax account for more information.
Questions About Capital Gains Taxes
There is no way for a home seller to save on capital gains taxes on investment property. Tax law requires that you live in the home for two of the past five years in order to save on capital gains. Here are the answers to some common questions about capital gains taxes when selling a home.
Escrow Management And Who Pays Taxes
Escrow accounts hold money to pay property taxes. You can either manage your own escrow account or let your mortgage company do it. But if you manage your own escrow account you will get to earn interest on your escrow money. The best way to manage escrow money depends on each home owner.
Selling A Home You Got As Inheritance
When you receive a real estate inheritance you may decide you want to sell it. But how can you sell a home that's a real estate inheritance without paying too much tax? And how large does an estate have to be for estate tax to be triggered? The best way to resolve these inheritance questions is to consult with an estate attorney and accountant.
Transfer Taxes Can Be Significant
Transfer taxes are based on the sales price of your home. Transfer taxes are public record, but you can also find out about them from your lender or title company. Nearly every county, state and local municipality raises money via transfer taxes. These are stamps that sellers are required to purchase that must be affixed to the deed in order for the transaction to close.
Prepare Early For Tax Time
It's not even the end of the year, but fall is the perfect time to start thinking about your taxes. With plenty of time left to spare in the year, you can make sure you pay the right amount next April 15, or even maximize your deductions.
How To Avoid Tax Scams
WGN TV Show Notes For Tuesday, April 3, 2001 ANCHOR: You've got just 12 days to file your federal and state income taxes. But that's still enough tim...