Tax windfall

So easy!I just saved $345, and no, I didn’t switch to Gieco. I highly recommend getting a rental property, it’s a great deduction source. Originally, I wasn’t able to deduct my mortgage interest and property tax because I didn’t reach the standard deduction threshold. I submitted it yesterday, but then I tried putting those values in Turbo Tax under my rental property (I share my house equally with the guy I rent to so I call it 50%). This allowed me to take a deduction of half my interest and taxes paid without itemizing. On top of that, just for 2008, there is a standard deduction of up to $500 if you payed that much in property taxes. I payed just over $1000 in real estate tax in 2008. So half was deducted using the rental property and the other half with the standard deduction, all without itemizing. The trick is, when you have a rental property, you can include things such as depreciation to deduct from the amount you earn and even take losses. The losses are taken right from your AGI and not considered an itemized deduction.

Now I can mail in an amended return and only owe $200 instead of $550. Cha-ching!

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One Response to “Tax windfall”

  1. Clay Says:

    Oh… you seriously just said that you didn’t switch to Geico. I was thinking it and then you said it. Sad. šŸ˜‰

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