just bought a house will we owe on tax return?
My husband and I are aware of having to pay our monthly taxes and have an impound account to cover that. We are also aware of the fact that we will soon be expecting a supplemental tax bill. when it comes to tax season should we anticipate any additional taxes as homeowners ?
We already received the first time home buyers credit. Is there anything else we would be able to claim on our return such as moving expenses?
- BobbieLv 79 years agoFavorite Answer
Any deductible qualified moving expense would have to be job related and meet the distance test before you would able to deduct any of the qualified moving expense amounts IF you have any.
Go to the www.irs.gov website and use the search box for Topic 455 - Moving Expenses
If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses but not any expenses for meals. To qualify for the moving expense deduction, you must satisfy two tests. Under the first test, the "distance test", your new job must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job must be at least 50 miles from your old home.
The second test is the "time test". If you are an employee, you must work full-time for at least 39 weeks during the first 12 months right after you arrive in the general area of your new job. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new work location.
Using the schedule A itemized deductions of the 1040 tax form qualified mortgage interest and property taxes that you paid during the year for the purchase of the house (home)
Use the search box for Publication 936 (2009), Home Mortgage Interest Deduction
Part I. Home Mortgage Interest
This part explains what you can deduct as home mortgage interest. It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return.
Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan.
You can deduct home mortgage interest if all the following conditions are met.
Hope that you find the above enclosed information useful and good luck to you.
- edcoLv 59 years ago
I'm unclear in your question(s). Perhaps you can edit and explain further.
Do you mean real estate taxes that you pay to your town/city ? I've never heard of them being paid monthly, they are usually paid quarterly, but if you have a mortgage and the bank is paying the taxes then you have an escrow account whereby a portion of your monthly payment is withheld to pay the taxes at the end of the quarter.
Why are you expecting a supplemental tax bill ? Was the house reappraised or did you do some remodelling that is causing the town/city to bill you at a rate higher than what was calculated at the time of closing ?
I also don't understand what you mean by "when it comes to tax season should you anticipate additional taxes as homeowners?" Income tax has nothing to do with home ownership. Both federal and state (and city when appropriate) is based on income less deductions. Period.
You can (as someone else mentioned) claim mortgage interest you paid and real estate taxes paid (by your or by the bank who holds your mortgage on your behalf). If you moved for work, there are special circumstances where some of those costs could be written off, but it's too complex to try to answer here.
Best to find a good tax accountant.
- JudyLv 79 years ago
The deductions for the house aren't likely to affect your tax return this year. Since for the next year you'll have had it all year, it might cut your tax bill a little.
The home buyers credit is not taxable.
Moving expenses - only if one of you changed jobs, you moved because of that, and the distance from your old home to your new workplace must be at least 50 miles farther than your old home to your old workplace - then they might be deductible.
- troLv 79 years ago
woops! moving expenses? only if you moved more than 50 miles from your previous home to work and your new job
depending on when you purchased the home, the mortgage interest and property taxes you paid will be included in your Sch A, itemized deductions which you probably did not have when you rented
- How do you think about the answers? You can sign in to vote the answer.
- Anonymous9 years ago
Moving can be deductible if your job also moved. Buying a new house because you liked it isn't enough.
As far as itemizing your mortgage interest and property taxes, it's unlikely that you paid enough in 2010 to allow you to itemize. As a married couple, you standard deduction is already $11,400.
- Anonymous9 years ago
Why not think of the the tax breaks?
You might want to read this article, Tax Breaks for Buying a Home, http://www.kiplinger.com/features/archives/2007/01...
If you need more assistance, consult http://thefirsttimebuyerclub.com/HouseBuyingSolici...
- Anonymous9 years ago
Buying a house does not mean that you incur additional income tax liability.
- cainvest1Lv 79 years ago
The interest paid on the mortgage is deductible.