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kennytheb, Other/Just Looking in Elk Grove Orchards,...

I bought my first home in Mar. 2012. What may I deduct at tax time? Am I not able to use my standard deduction if I deduct my interest?

Asked by kennytheb, Elk Grove Orchards, Elk Grove, CA Tue Nov 20, 2012

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You should talk to a tax professional or cpa.
0 votes Thank Flag Link Thu Dec 6, 2012
I agree with all of my esteemed colleagues. You should talk to a tax professional or cpa.
But, if I remember correctly, (assuming that you have the option to choose between the standard vs itemized deductions), then I do not think you could deduct your interest once you choose the standard deductions. I am assuming that the interest deductions are for your own primary residence.

Here is a link to an IRS article about itemized deductions:
http://www.irs.gov/uac/Six-Facts-about-Choosing-the-Standard…
http://www.irs.gov/taxtopics/tc501.html

You might want to ask your question to a forum for tax professionals or cpas, e.g.
http://www.hrblock.com/tax-answers/index.html
0 votes Thank Flag Link Wed Nov 21, 2012
Hi kennytheb,

I normally suggest contacting a tax professional 99% of the time when the question relates to taxes; however, your question is quite common for any new Homebuyer and there are many information sources to help arrive at a decision based on “the numbers” only you have knowledge of.

Bottom line:
You either have to take the Standard Deduction OR Itemize your deductions and here’s a few ways to decide:

1) Stick a toe in the "Deductions Pool" before jumping in by reviewing:
"Deciding Whether or Not You Should Itemize Your Deductions"
http://financialplan.about.com/od/taxplanning/a/ItemizingTaxes.htm

2) Time to jump in. Start by reviewing these standard and popular IRS Guides:
Tax Info for Homeowners: http://www.irs.gov/pub/irs-pdf/p530.pdf
Home Mortgage Interest Deduction: http://www.irs.gov/pub/irs-pdf/p936.pdf
Schedule A – Itemized Deductions: http://www.irs.gov/pub/irs-pdf/i1040sca.pdf

You might consider reading all of this info is too much work; however, it's nothing compared to what CPAs go through each year (current US tax code hovering around 75,000+ pages!).

Seeing a tax professional is always a smart option; however, as a new Homeowner you should personally and fully understand what can contribute to your itemized deduction amount. Nobody knows better than you where your money is being spent right now and coupling this knowledge with the details the IRS publications provide will allow you to maximize your deductions.

Once you have a firm footing on what can be itemized the calculators below may provide a quick answer on which way to go as well. Recognize you have to understand ALL of the applicable itemized deductions to make the results of the calculator relevant AND I would double check the results!

http://www.1040.com/tax-tools/calculators/should-i-itemize-o…
http://www.calcxml.com/do/inc10

Best Regards, -Steve
0 votes Thank Flag Link Wed Nov 21, 2012
Another vote for "Talk to your tax person ..."
0 votes Thank Flag Link Wed Nov 21, 2012
This is specifically a tax accountant, CPA question. It totally depends on your specific income and other personal financial situation.
0 votes Thank Flag Link Wed Nov 21, 2012
So many 'it depends' to answer your question. it depends on your income base, it depends on your specific tax situation. You need to speak to an accountant.

I had heard that the new tax laws put in place with passing prop 30 created retroactive tax burdens that will be effective with your 2012 tax return. I wonder if the citizens who voted for it understood its impact but it is what it is. I'm not sure anyone understands it as well as tax accountants.

If you need a great tax accountant, call Ed Cook at (916) 705-4958.
0 votes Thank Flag Link Tue Nov 20, 2012
Kenny,
You will have to speak to a tax expert, no Realtor or Real Estate Agent is qualified to advise you on this. However, from personal experience, I can tell you the tax deductions I applied as a homeowner far beat any "standard" deduction. I even was able to deduct my costs of purchase, like appraisal and inspection fees. That was several years ago, and tax laws always seem to be changing, so check with your tax pro so you get everything coming to you!
0 votes Thank Flag Link Tue Nov 20, 2012
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