Deductible Property Taxes |
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Written by Glenn Bailey
on Tuesday, 08 November 2011 |
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What taxes on real estate are deductible? Many people will get out their end of year mortgage statement or Form 1098 and look for the “Real Estate Taxes Paid” line on the form and use that amount. However, depending on where you live this number may contain several non-deductible fees and assessments. In order to accurately determine the deductible taxes you paid you need the actual tax bill. The state of California is making an effort to educate property owners about which taxes are deductible in an attempt to reduce the tax gap. In a time of falling revenue many governments are looking for any extra tax revenue they can find.
A deductible real estate tax is based on the assessed value of the property (called “ad valorem”) and charged uniformly against all property in the taxing authority's jurisdiction. A deductible tax must be imposed by a governmental body which could be state or local. This rules out fees and payments to homeowners associations and many utility districts as well as payments to developers or companies for maintenance of public or private areas.
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DC Delays Muni Bond Income Tax for One Year, Adds Higher Top Tax Rate (UPDATED) |
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Written by Brian Wynne
on Wednesday, 21 September 2011 |
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First, the bad news. Effective October 1, 2011, DC residents with taxable income above $350,000 in a tax year will be subject to a new 8.95% tax rate on that income. This is up from a top rate of 8.5% on income over $40,000. This rate will be effective for 4 years only, then expire. Now, the good news. The higher rate was implemented as an offset to pay for delaying the taxation of out-of-state municipal bond income. Municipal bond income from any jurisdiction outside of DC was scheduled to be taxed in DC starting January 1, 2011. That income will now be taxed starting January 1, 2012, providing a one-year delay to the inevitable taxation of this income, and eliminating the need to adjust estimated taxes for 2011. Mayor Vincent Gray will sign the emergency budget amendment as soon as it hits his desk. UPDATE: 9/22/2011: The new law changes the taxation of non-DC municipal bond income in one additional way. Previously, the tax, when it took effect, applied to all non-DC municipal bond income. With this new law change, the tax applies only to non-DC municipal bonds purchased after the effective date of January 1, 2012. This "grandfathers" in existing bonds but creates additional complexity in determining which bonds are subejct to the new tax.
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Updates in Washington, DC, Maryland and Virginia |
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Written by Billy Thomas
on Thursday, 17 February 2011 |
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District of Columbia: Reports have shown that E-filing your return typically results in a quicker refund. Now DC is allowing individual taxpayers the opportunity to track his or her refund online. Follow the link to check your refund status: Refund Status Inquiry Maryland: The Comptroller of Maryland has announced a ‘Tax Free’ Weekend. Well tax-free for those individuals and entities purchasing qualified energy efficient equipment. Qualified energy efficient equipment includes equipment with the ‘energy star’ product seal (refrigerators, heat pumps, furnaces, air conditioners, etc.). Purchases of ‘energy star’ products between February 19, 2011 through February 21, 2011 will NOT be subject to the 6% sales tax. Virginia: Similar to Maryland, Virginia will have a qualified energy efficient equipment sales tax holiday between October 7, 2011 and October 10, 2011. Conversely, purchases of this nature will only be exempt from sales tax if the equipment is purchased for noncommercial home or personal use.
In addition, Virginia is following suit with the federal government. Virginia has again passed legislation for Fixed Date Conformity through 2010. Fixed Date Conformity simply means in general, the Commonwealth will comply with the current federal tax code.
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Virginia Corporate & Passthrough Tax Returns due 4/15 |
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Written by Brian Wynne
on Monday, 14 February 2011 |
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The Virginia Department of Taxation clarified on Friday that calendar-year corporate and passthrough entity tax returns are due Friday, April 15, 2011. There was some confusion as the Federal and most states filing date was moved to Monday, April 18 this year, due to a holiday in Washington DC (Emancipation Day). Virginia does not recognize this holiday as a legal holiday and therefore will not move it's due date.
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Snow Bound Musings: The Tax Implications of Telecommuting |
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Written by Eric Fletcher
on Wednesday, 17 February 2010 |
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Like most people in the Mid-Atlantic states, I spent most of last week stuck at home as a virtual prisoner of the snow storms that pounded our area beginning on February 5. During this period, the “busy season” for accountants and tax preparers, these lost work days could have been disastrous. Fortunately, by using computer technology, most of the professionals in my firm were able to remain productive and work remotely from home. With the proliferation of computer technology and high speed internet connectivity over the past 20 years, telecommuting has become a more significant and pervasive movement in our economy. Working from home or telecommuting has become routine for many workers. For employers this technology can reduce costs for office space and aid in the recruitment and retention of quality personnel. Likewise for employees, the use of telecommuting can not only aid in the balance of work and life, but also greatly expand the potential market for their services. As the roads were finally cleared and I returned to the office, I was greeted by the February edition of The Tax Adviser which contained an excellent article by Ilya Lipin, discussing some of the tax ramifications of telecommuting. Given my recent, albeit temporary foray into the virtual workplace, I was inspired to share some of the excellent information provided by Mr. Lipin as well as a few thoughts of my own regarding the tax ramifications of telecommuting.
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