Death And Taxes Is A Debt We All Must Pay

In life their are only two things that are certain and that is death and taxes. The one thing that is never certain is how much taxes you will pay. And unfortunately when it comes to Federal Income taxes the bite can be substantial. And if your in the top income tax bracket you can be hit for a shopping 35 percent of your taxable income. And in order to pay less taxes you must take full advantage of all available tax deductions.

And you will find out quickly that while various books , web sites and infomercials claim other wise that their are very few income tax deductions available to the average tax payer unless you own a farm , operate a business , or have a substantial trust or investment income. You will also find that while some things are technically tax deductible that you must meet a certain level or percentage before the deduction is available to you. One example of this is that while medical expenses are tax deductible it is really only true if your medical and doctor bills exceed 9 percent of your income.

However if you happen to own real estate there are several substantial tax deductions available to you. The U.S, government continues to encourage home ownership and the purchase of homes this way. Are you aware that the interest on a mortgage is tax deductible. And you should know that on new mortgages that any points paid on the loan are also deductible for you.

One key deduction that a lot of people miss is the property tax deduction. People seeking professional tax advise at the paid tax services and public accountants seek to deduct money paid for taxes. And this desire is easy to understand. Because it really seems unfair to pay taxes on money that is used to pay taxes. And fortunately when it comes to property taxes you will find that the tax code agrees.

You don't want to be one of the many U.S. tax payers that forget about deducting property taxes paid on their income tax returns. Many people tend to forget that they paid the property taxes so they never ask the person preparing their return for the deduction. People also forget because in the case of mortgages the mortgage company is quite often responsible for paying property taxes for you during the term of the loan. The mortgage company is using your money to pay the property taxes with so the deduction is yours.

You need to use a IRS Form Schedule A to claim your deduction for property tax deductions and you will want to fill in the right amount on line 5 which is for real estate taxes. You want to be sure to keep careful records and receipts so you will know the amount you paid for property taxes so you can claim the correct amount. You can claim property taxes paid to your city , county and state so be sure to add up the amounts and claim it all. Keep in mind that if your mortgage company paid your property taxes as part of your mortgage you should receive a form 1099 INT from the mortgage company and the amount paid for property taxes should be found on that form.