Itemizing my taxes???

Question

I just purchased my first home last month and my morgage broker was telling me that I will have to itemize next year. I have been doing my taxes eversince I started working and have never itemized, am I better off hiring somebody, efiling, or doing it myself? I'm iffy about hiring somebody cause I dont want to get screwed. and is it worth itemizing??

Answer 1

As the others said, you will itemize when it is better to do so and take the standard when that is better to do so. The IRS lets you choose whichever is better.

If you are computer savvy, then you should be able to handle your own taxes. Wait until all your tax forms arrive in the mail. Not only will you get W-2s from your employer, but you'll also get a new form called a 1098. It tells you how much interest you paid to your mortgage company. If you have an escrow account, the 1098 will also tell you how much real estate taxes you paid which is also a write-off.

There are lots of other things on Schedule A that you've never dealt with before that you now need to include. Be prepared to spend some time at your computer using Tax Cut or Turbo Tax. It will walk you write through it. You may have to do some research like going through your checkbook to see what you gave to charity. You can also go on-line and do your taxes without having to purchase software, like on www.hrblock.com. You will have to pay for it, but it isn't much.

If you don't have the time to do all this, or if you are uncomfortable with the software, the computer, or if you want someone else to do your taxes in the first year of home ownership to see how it is done, go see a tax professional. Don't pay more than $200. It can be well worth it if they find something you never though of.

Answer 2

If you just purchased your home this late in the year, you might or might not have enough to itemize in 2007 when you file taxes for 2006. You probably will the next year (filing early 2008 for 2007).

If you've been doing your taxes yourself up to now, you probably won't have trouble itemizing either - it's not real hard. Read the instructions and fill out the form. If the total itemized deductions turns out more than your standard deduction, then take the itemized amount. Give it a try for 2006 (filing in 2007) - it's worth a look, you might have enough.

You could buy something like turbotax - will make it easier to do.

Answer 3

It is definitely worth itemizing... there are huge benefits to itemize... your taxes on the house and the mortgage interest are both things to be added to the schedule A along with several other items... health care, car registration, charitible contributions, maybe school tuition, etc.... this itemization could then be larger than the standard deduction that someone who can not itemize has to use.... Look over last years tax forms for itemizing and the 1040 to see by yourself if itemizing will help you... anytime you can possibly get more money back from the government the better off you are so first look into it by yourself or with friends/relatives that do itemize then if it is still confusing, pay for someone to do the work for you.

Please look at doing this yourself if you do not trust someone else.

Another idea would be to have someone else do the first year of itemized taxes then you could follow what they did on the following years by yourself...

Answer 4

I think you should still be able do file your taxes yourself. And by the way you don't "have to" itemize. What you will need to do is fill out a Schedule A for form 1040. If the total amount of schedule A is higher than your standard deduction(I think it is 5100 for single in 2006) than you file Schedule A with your form 1040. If you file online or with TurboTax, there is usually a serious of questions that tell you whether it is more beneficial to itemize or not. If your Schedule A is not higher than your standard deduction, then you just file a 1040 like you always have. Items on Schedule A include: medical expenses over 7.5% of AGI, mortgage interest paid, real estate taxes paid, cash and non cash charitable donations, etc. See the instructions for Schedule A Itemized Deductions on the irs website for a full list.

Answer 5

Get a tax booklet or Pub 17 and read through the instructions for Sch A. If you itemize in 2006 as single your will have to excede $ 7,400.00 to make it worth your while. This late in the year your mortgage interest probably won't amount to enough unless you paid points and property taxes also and went through the the 74 mark. If you have specific questions just ask me; I have done returns for 36 years.

Answer 6

You only itemize if your total deductions are higher than the 'standard' deduction for your scenario (single, married, etc.) The reason you haven't itemized before it probably that you didnt have more than the standard deduction.

You can do your taxes online somewhere like turbotax.com and it will ask you ALL The neccessary questions-- "Do you own a home"? "Did you go to an accredited college?" etc.... it will figure out if it is better for you to itemize or not.

Otherwise, a tax person is NOT trying to screw you and its under $50-100 to use one.

Answer 7

The only way you itemize is if your itemized deductions are more than the standard deduction. If they are not, then you would be better off taking the standard deduction. Buy Turbo Tax and it will help you fill in all the required fields and also help you in determining whether you can itemize or not. You can claim your mortgage interest without itemizing.

Answer 8

No. those are centers and are not deductible despite the fact that if called a "tax". If the state levys sales tax on utilities on the final cost, that would nicely be deducted in case you itemize and prefer to deduct State sales Taxes extremely of State earnings Taxes.

Answer 9

If your mortgage interest, real estate taxes, state and local taxes, and charitable contributions when added together exceed your standard deduction, then yes you should itemize.

For this year I would recommend seeking the advice of a tax professional. Not an H & R Block hack, but someone who actually understands taxes and can give you some advice that you can work with in the future.

Answer 10

If you've already been filing on your own for a few years, and all that has changes is buying a home, then you can still do them by yourself. Purcahse Turbo Tax to guide you, its cheeper than H&R Block.

You only itemize if it saves you money. And its worth the effort to see if it saves you money.