Be aware that important tax consequences are often associated with some fairly common events involving your home. Here are some handy things to know.
Home purchase. When purchasing a home, you may pay a portion of the mortgage interest in advance. This loan origination fee, or “points,” is a percentage of the total amount borrowed.
If points are paid for a principal residence, you generally can deduct the full amount in the year paid, even if the points were paid by the seller. One caution: you must reduce your home’s tax basis (cost) by the amount of seller-paid points.
Of course, one of the greatest tax benefits of home ownership kicks in during the early years of the mortgage, when most of your payments go toward tax-deductible interest.
IRA withdrawals. The tax law allows penalty-free IRA withdrawals, up to a lifetime limit of $10,000 for the purchase of a first home for you or members of your family. Withdrawals from Roth IRAs for qualifying first-home expenses can be both penalty-and tax-free after the Roth is five years old.
Refinancing. What happens if you refinance? If you pay points, the general rule requires that you prorate deduction over the life of the loan. But if some of the refinance proceeds go toward home improvements, you may be able to take a current deduction for the portion of the points related to those improvements.
Taxes often come into play for homeowners, and it’s important to be aware of potential benefits and pitfalls. To learn more, schedule time with one of our tax experts here.
Websites : https://bas-pc.com/
The convention of FTE has different angles but rounds up to wage and accounting elements. Despite this, measuring the full-time equivalent is also rational from the perspective of forecasting the future workload an organization can take and assist with its successful management. full time equivalent