Americans have always been mobile, as evidenced by this vintage photo from Flatbush Moving in Linden, New Jersey. Now some folks say they're relocating because of new tax law limits on deductions. Now that the Treasury Department and Internal Revenue Service have made it clear that they will restrict state efforts to work around the new $10,000 cap on the deduction for state and local taxes (SALT), some folks are looking at other options. Among them, according to a New York Times story, is to move. (Unfortunately for them, the new law also, for the most part, ended the tax... Read more →
Real Estate Housing
Sunsets like this one at Zuma Beach in Malibu, California, make many Golden State coastal properties prime rental investments. But Golden State limits on property taxes on inherited homes cost cities and other jurisdictions billions of dollars. (Photo by Alex Beattie via Flickr CC) Californians love Proposition 13, the grandfather of tax-limiting ballot initiatives. Since its passage in 1978, it has kept a tight cap on property tax increases. But an expansion of the original Prop 13, enacted eight years later, and its unforeseen consequences have cost Golden State school districts, cities and counties of billions of dollars in revenue,... Read more →
Summer is winding down, but someone needs to tell the thermometers. Across much of country, it feels like the mercury is about to burst and everyone is doing everything they can to stay cool. Sorry, I can't help you beat the heat. But I do have eight tax moves you can make in this eighth month of 2018 — which, with all those 8s, makes that this week's By the Numbers figure — that might be able to help lower the heat you're feeling when it comes to taxes. 1. Adjust your withholding. I know. I nag remind y'all of... Read more →
As expected, states whose residents will take a major federal tax hit under the new $10,000 limit on deductions of state and local tax (SALT) payments have headed to court. Connecticut, Maryland, New York and New Jersey on Tuesday (July 17) afternoon filed a lawsuit in federal court in New York seeking to invalidate the Tax Cuts and Jobs Act's (TCJA) changes to a long-standing federal tax deduction. In this latest semi-reform of the tax code, Congress essentially gutted the value of this itemized tax deduction for, in most cases, the millions in state income and local real property payments... Read more →
School's out. Summer is here, at least unofficially judging by the temperatures. And thousands of Americans are planning vacations. There also are a sizable number of homeowners hoping to make some extra bucks off all those seasonal travelers. Home rental popularity: Alternative accommodation, as the segment is known in the industry, appeals to those looking to immerse themselves in a new place culturally. Other opt for such lodging for the privacy (no paper-thin hotel walls), convenience (cooking meals instead of always eating out; use of the owner's Wi-Fi or streaming services) or amenities (a private pool) of a personal home... Read more →
Lots of my neighbors are looking to sell, even though for most of us there's no longer a tax break for moving. However, many homeowners still will pocket tax-free sales cash that should help cover relocation expenses. No, this is not my neighborhood, although where we live is, except on lawn service days, pretty quiet, too. Summer always kind of freaks me out, and not just because here in Central Texas it tends to get too damn hot too damn soon. I'm talking about all my neighbors who want to leave. Every summer there's a plethora of "For Sale" signs... Read more →
Expensive real estate no longer provides owners unlimited federal property tax deductions. The Internal Revenue Service announced today that it will make an announcement about states efforts to provide taxpayers workarounds to the Tax Cuts and Jobs Act's $10,000 limit on state and local tax (SALT) federal deductions. The issue has arisen as a handful of states have enacted or are considering law changes to allow their residents to make contributions to state accounts, from which their state taxes then are paid. State "charity" workarounds: Essentially, the states' general approaches have been to effectively turn the tax payments into charitable... Read more →
The beach view of the newest Trump South Florida property. (Photo via Zillow) While many homeowners are in the process of protesting their residential property appraisals in the hopes of lowering their tax bills, Donald J. Trump is adding to his potential property taxes. The Trump Organization recently closed on a waterfront mansion just across the street in Palm Beach, Florida, from Mar-a-Lago. The property at 1125 South Ocean Boulevard was on the market for $23.9 million, but the Trumps got it for $18.5 million. Friendly transaction: The price break probably didn't take a lot of haggling. The 8,270-square-feet property,... Read more →
Jacksonville, Florida, officials might have trouble keeping their lights on if some of the city's residents don't pay their delinquent tax bills. (Photo courtesy Visit Jacksonville) Jacksonville, home to around 880,000 residents, is the largest city in the Sunshine State. It takes a lot of money to run a municipality of that size. Some of its residents, however, have decided not to pay. Their free ride, though, won't last for much longer. $58 million unpaid: More than 35,000 people owe a combined total of $58 million in unpaid taxes to the city of Jacksonville, according to WJXT News4Jax. That's almost... Read more →
We got our notice of appraisal for our house last week. It was, as has been the case for the last few years, higher. If we were selling our house right now, we'd be thrilled. But we're not moving (yet). This week, we got our monthly neighborhood newsletter. It included a local Realtor's ad touting local listings. One was for a house down the block. The asking price was $300,000 more than our appraisal notice. Yes, that home is a bit larger than our house. And it has a pool. But is it worth $300,000 more than our home? The... Read more →
Are you still waiting to file your taxes because you want additional guidance from the Internal Revenue Service about the 2018 property taxes you prepaid last year? You are not alone. A group of Democratic lawmakers, some of who met with the acting head of the IRS last month on this topic, are continuing to press the agency for a final rule about this deduction that was reduced under the newly enacted Tax Cuts and Jobs Act. The latest demand for deduction clarification came earlier this week when some Democrats on the House Ways and Means Committee sent Acting IRS... Read more →
If you've been wondering when you can take advantage on your 2017 tax return of a recently renewed tax extender, your wait could be over. The IRS announced today, Feb. 22, that it's now ready to process returns claiming three recently renewed tax breaks Surprise extenders: Congress threw the tax world for a loop earlier this month when it tacked some expired tax break onto its budget bill. The tax laws, popularly known as extenders because they are temporary and must be periodically renewed or extended, included a variety of tax breaks for businesses and individuals. Immediately following the Congressional... Read more →
During an overnight session, Congress ended a brief government shutdown and retroactively approved some expired tax breaks. Remember those tax breaks that expired at the end of 2016? Most of them, including four were claimed by many individual taxpayers, are back. But just for the 2017 tax year. That's good and bad news for filers who last tax year: paid college tuition and fees, had a mortgage payment that included private mortgage insurance (PMI), made certain energy efficient improvement to their homes or reworked their home loan and in that process had some of the debt forgiven. Yep, those tax... Read more →
Anger over the new Tax Cuts and Jobs Act's limits on federal tax deductions for state and local taxes (SALT) has spilled over into 2018, with lawmakers from high-tax states still looking for ways to undo this provision. Some have petitioned the Internal Revenue Service for revised, more filer-friendly property tax guidance. Other have introduced legislation to fully restore the now-limited SALT itemized write-offs. You thought the battle over paying 2018 local property taxes so that they could be claimed on 2017 tax returns ended on Jan. 1. You were wrong. Asking IRS to reconsider: Sen. Chuck Schumer, Senate minority... Read more →
Homeowners are still trying to wrap their heads — and tax plans — around the many Tax Cuts and Jobs Act (TCJA) changes to the Internal Revenue Code that are related to personal real estate. There's the new limit on federal deductions for mortgage interest on future home loans, the cap on real estate taxes on your primary residence and the elimination of the write-off for interest paid on home equity loans. When the new tax law took effect on Jan. 1, the deduction on home equity lines of credit (HELOCs) or home equity loans became a thing of the... Read more →
Welcome to the first work day of 2018. By now you (and I) have had enough coffee (maybe, even this late in the day) to think about what the year ahead will hold for taxes. Chippy the Dog via Giphy.com Since my personal orbuculum is still a little blurry — I'm blaming equally the aftermath of New Year's Eve festivities and the craziness that now rules Washington, D.C. — I have only six tax-related prognostications. But even with the fuzzy focus, one thing is clear. Most of what we'll see happen in the tax world in 2018 will be related... Read more →
It's almost 2018 and we all know what that means. Resolutions, fresh starts and lots of new tax laws. The good news is that for the most part, the changes to the tax code under the Republican-led tax bill will not affect us until we file our 2018 tax returns in 2019. But some of those changes in the still-called Tax Cuts and Jobs Act mean we will need to make some tax moves now, this final week of 2017, to take advantage of some tax provisions that won't be around or will be dramatically altered when Jan. 1, 2018... Read more →
There's a tax bill, but there is no tax reform. There's still an estate tax. There are still (some) state and local itemized tax deductions. There's still an alternative minimum tax. And there are enough other tweaks to confuse filers and keep tax pros very busy over the next 12 (and more) months. Ways and Means Chairman Kevin Brady (R-Texas) presides over the lone public hearing Dec. 13 of the House-Senate conference committee on H.R. 1, the Tax Cuts and Jobs Act. Final House and Senate votes on the bill are planned for next week. Basically, the Republican tax bill... Read more →
Vice President Mike Pence (waving) and Ways & Means Chairman Rep. Kevin Brady (far right) leave a Dec. 12 meeting in which they discussed the final touches being made to the Republicans' tax bill, H.R. 1, the Tax Cuts and Jobs Act. (Photo courtesy Brady's Facebook page) Breathe a sigh of relief, all you payers of state and local income taxes. The tax bill under consideration will help you. Or not. House Ways and Means Chairman Kevin Brady (R-Texas) announced to reporters today (Thursday, Dec. 14) that conference committee members — or at least the Republican conferees — have agreed... Read more →
U.S. map from vintage state postcards by Design Turnpike/Fine Art America State tax departments and lawmakers have joined individual and business taxpayers in closely watching and anxiously awaiting any possible changes to the federal tax code. Just like businesses and individuals, states will benefit or suffer depending on what the House and Senate tax reform conference committee decides. Most states collect some sort of tax — only Alaska has no income and no state (but some local) sales tax — and most of those states tie their tax methods, especially when it comes to income tax collection, to federal law.... Read more →