5 Common Tax Issues for Realtors
I own some rental properties.
Can I get any kind of deductions from those properties? You can and here's how: If you're paying a mortgage on the property you can claim the interest on the loan as a deduction.
Now you do have to report the rent you receive as income on your tax return, so don't forget that.
But any repairs or improvements you make on those rental properties are valid deductions.
If I owe the IRS money and I'm able to sell a house can they seize the money I make off of that? Absolutely, the commission you make off of a house sale count as wages as far as the IRS is concerned and they can seize any money you make to pay down the debt you owe to them.
The IRS won't take it all, but they'll only leave you with about 50% of what you would have made.
I work out of my home.
Are there any deductions available to me that can help out with my tax return? If you work out of your home and you can prove to the IRS that you conduct the majority of business out of your home you can write off a portion of your mortgage payments for the year.
Even if you rent you can count part of your rent as a deduction for your home business.
Last year I made really good money and ended up owing the IRS.
When the money was coming in I didn't have any problems paying.
Now that there's a slump in the market I can't afford to pay the debt.
What options do I have? Right now you probably still have too much equity and assets to qualify for a settlement offer.
Of course your industry can and most likely will make a recovery.
The best thing for you to do if you owe and you can't pay in full right now is to enter into a monthly payment plan until you're in a better financial situation.
While you're in a payment plan the IRS shouldn't take any kind of collection action against you.
I'm considering bankruptcy.
Can I get my tax debt included in the bankruptcy? It's not likely that you'll be able to.
You can't include any tax debt in a bankruptcy if the debt is less than three years old.
If you're financial situation has occurred within the last couple of years then you wouldn't be able to include it.
Now you have the smoking gun...
Use it!
Can I get any kind of deductions from those properties? You can and here's how: If you're paying a mortgage on the property you can claim the interest on the loan as a deduction.
Now you do have to report the rent you receive as income on your tax return, so don't forget that.
But any repairs or improvements you make on those rental properties are valid deductions.
If I owe the IRS money and I'm able to sell a house can they seize the money I make off of that? Absolutely, the commission you make off of a house sale count as wages as far as the IRS is concerned and they can seize any money you make to pay down the debt you owe to them.
The IRS won't take it all, but they'll only leave you with about 50% of what you would have made.
I work out of my home.
Are there any deductions available to me that can help out with my tax return? If you work out of your home and you can prove to the IRS that you conduct the majority of business out of your home you can write off a portion of your mortgage payments for the year.
Even if you rent you can count part of your rent as a deduction for your home business.
Last year I made really good money and ended up owing the IRS.
When the money was coming in I didn't have any problems paying.
Now that there's a slump in the market I can't afford to pay the debt.
What options do I have? Right now you probably still have too much equity and assets to qualify for a settlement offer.
Of course your industry can and most likely will make a recovery.
The best thing for you to do if you owe and you can't pay in full right now is to enter into a monthly payment plan until you're in a better financial situation.
While you're in a payment plan the IRS shouldn't take any kind of collection action against you.
I'm considering bankruptcy.
Can I get my tax debt included in the bankruptcy? It's not likely that you'll be able to.
You can't include any tax debt in a bankruptcy if the debt is less than three years old.
If you're financial situation has occurred within the last couple of years then you wouldn't be able to include it.
Now you have the smoking gun...
Use it!
Source...