ASk An Accountant- 6/25


Thanks to Momondealz for bringing us this post each week!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at momondeals@yahoo.com
Question:
If you’re late filing your taxes and the government owes you a refund, are you penalized?
Answer:
You will not be charged if the IRS owes you a refund. They can assess a failure to file, or assess tax based on the information they receive (which is all income from reportable sources & limited deduction info) so the result will be a tax due.
Question:
Are there any tax penalties for selling your 1st personal home if you bought a 2nd personal home before the first one sold? (I’m afraid it’s going to be years before we finally get the first house sold)
Answer:
There is typically no tax on the sale of a primary residence as you are given a $250K exclusion (Single) or $500K exclusion (Married filing Jointly). If the gain (sales price less original cost plus improvements) exceeds the exclusion, then you will pay capital gains tax on the gain. You can own & deduct a primary & a secondary for tax purposes so this should not be an issue if the first does not sell immediately. The only issue I see here is if the original primary was a rental property after you bought the 2nd home. Then there is no exclusion & it is all capital gain.
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

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Ask An Accountant- 6/10


Thanks to Momondealz for this informative post each week!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at momondeals@yahoo.com
Question:
What expenses can you not claim on your taxes?
Answer:
The items not deductible are expenses that would not be used to generate a profit. One example would be groceries. You could not deduct groceries from a shopping trip that you used to post on your website. The groceries are a necessary item needed to sustain life, not make a profit. Commuting mileage cannot be deducted, only the mileage to and from couponing class held outside of your home/office. Personal expenses and profit distributions are not deductble. This question is better answered by including what is deductible…epenses directly related to the generation of profit, that are not necessary living expenses
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

This post may contain a link from a sponsor/affiliate of Just Trying To Save Money. Please see my Disclosure Policy

Looking for more coupons? Check our Coupon Database for the latest coupons!

Just Trying To Save Money