Itemizing

[Earl E Retyre]

Just wanted to say thanks for those that posted about "bunching deductions"!

My real estate taxes are due in January. But, as I understand it, if I simply pay in December then I can claim both real estate tax payments in the same tax year and itemize. Then the following year, I take the standard deduction. This will save me quite a bit. Genius! Thanks for letting me know.

On a related note, I assume I can do a similar same thing for my rental property and claim both real estate tax payments as expenses in a single year. My tax rate should be much higher this year than next so that will add to my savings.

Now, I wonder what other tax related things I could be doing that I was unaware.

 

[Texas Proud]

Just wanted to say thanks for those that posted about "bunching deductions"!

My real estate taxes are due in January. But, as I understand it, if I simply pay in December then I can claim both real estate tax payments in the same tax year and itemize. Then the following year, I take the standard deduction. This will save me quite a bit. Genius! Thanks for letting me know.

On a related note, I assume I can do a similar same thing for my rental property and claim both real estate tax payments as expenses in a single year. My tax rate should be much higher this year than next so that will add to my savings.

Now, I wonder what other tax related things I could be doing that I was unaware.

Yes to the rental taxes....


Also be aware that you can double up for any deductible items... I make my DW get the info on our church 'contribution' (it is not voluntary) for the year... they usually ask for it in Feb, but I want to double up and pay both in the same year...

Also, major purchases for sales tax.... bought our last vehicle on a double dip year.... plan to do that when we redo the roof and upgrade the master bath....

I also try and get all medical in the same year for the same reason... however, that works better on years with less income since there is a threshold... this is hard to do as DW wants to get things done when she can and not wait...


But as I said before, none of this matters to me anymore as my income has dropped so much that it really does not matter... but, if the ACA is repealed and income is not used for the credit I will be doing tIRA to ROTH and it will make a difference... right now I want to maximize ACA credit...

 

[Souschef]

I have not been able to take anything but the standard deduction for years. My DW and I are both over 65, have no mortgage and have minimal property taxes.
I cannot lie or cheat to come up anywhere the standard deduction

 

[Senator]

On a related note, I assume I can do a similar same thing for my rental property and claim both real estate tax payments as expenses in a single year. My tax rate should be much higher this year than next so that will add to my savings.

FYI. If your renter pays January 2017 rent in December 2016, you are supposed to claim it in 2016. That assumes you receive it in 2016 and put it in the bank in 2016.

 

[pb4uski]

FYI. If your renter pays January 2017 rent in December 2016, you are supposed to claim it in 2016. That assumes you receive it in 2016 and put it in the bank in 2016.

It doesn't matter if you put it in the bank in 2016... if you receive it in 2016 then it is 2016 income.

You cannot hold checks or postpone taking possession of similar property from one tax year to another to postpone paying tax on the income. You must report the income in the year the property is received or made available to you without restriction.

 

[Texas Proud]

I have not been able to take anything but the standard deduction for years. My DW and I are both over 65, have no mortgage and have minimal property taxes.
I cannot lie or cheat to come up anywhere the standard deduction

It is one reason they have made the standard deduction much larger than before.... it is easier for you and them....

 

[Sunset]

Hmmm.... Are you paying tax for the next year 'early'? I would not think that would be deductible..... just like prepaid interest....

For me, our property taxes are not due until Jan 31st for the PRIOR year.... so one year I pay the previous years taxes in Jan and then the current years taxes in Dec.... all taxes are for years that have happened.... no prepaying....

The County sends us a "pre-payment" bill , but you might be right that taxes are really paid for the previous year ?

DW does the actual property tax paying so I don't know all the details other than we pay 3x in year 1, and 1x in year 2. Then repeat.

 

[Senator]

It doesn't matter if you put it in the bank in 2016... if you receive it in 2016 then it is 2016 income.

That is the idea anyway. I do not open my rent boxes until after the first.