When you buy a house, you can deduct points paid to get your mortgage all at once. But, when you refinance a mortgage, you have to deduct the points over the life of the loan.
You can deduct 1/20th a year if it's a 20 year mortgage.
On the year, you pay off the loan if you have sold the house or refinanced you may get to deduct all of the so far un-deducted points.
Unless you refinance with the same lender, then, you add points on the latest deal to the points leftover from the previous refinancing and deduct the expense ratably over the life of the new loan.
This can save you quite a bit of moolah if you inherited an IRA from someone whose estate was big enough to be subject to the federal estate tax. You can take an income-tax deduction for the amount of estate tax paid on the IRA balance.
So maybe you inherited a $50,000 IRA, and the $50,000 was included, in your benefactor's estate, it added $22,500 to the estate tax bill. As you withdraw money from the IRA and pay tax on it, you also get to deduct a proportional amount of the estate tax paid.
If you withdraw $22,500 in one year, for example, you get to claim a $11,125 itemized deduction on
A lot of people break out in a nervous sweat and get the shakes when it comes time to file their taxes.
The first time that I tried to file by myself left me with a feeling of confusion because I did not bother to read any information about how to go about it in a fair way, a way that didn't leave me broke and living in a cardboard box in the alley.
I just had at it without reading anything and it was overwhelming. I assure you that after all these years I won't get into a difficult situation like that without any proper info and good forms to file.
Some folks just file as fast as they can to get it over with. They loose out on a bunch of legitimate deductions and allocations that could have saved them a ton of money at tax time.
I would rather be getting a nice tax refund than pay the IRS a lot of money. Pay attention to the details.