First of all, I live in Wyoming and therefore there is no state filing; all my questions relate to federal tax information. I am married, and generally we just fiel a 1040EZ. This year, I am wondering if we should do it differently for the following reasons:
1 - We bought a house
2 - We bought 2 new vehicles
3 - We paid TONS of medical bills
I am seriously undereducated about taxes, so please tell me if these things are going to affect my tax return and how so? Also, if you know a good website that I can get some more information from that would be great!
2006-12-19 02:28:49 · 10 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
If you bought the house fairly early in the year, you'd almost certainly be ahead to itemize. If you bought it late in the year, it still might be.
A married couple filng joint gets a standard deduction of $10,300 for this year. If your itemized deductions are higher than that, then you should itemize. If they don't add up to that much, then stick with the standard deduction.
Itemized deductions include any interest and real estate taxes you paid in 2006.
The medical bills might or might not count. You have to subtract 7.5% of your income from the amount you paid, and can deduct anything over that.
As to the new vehicles, if either was a hybrid, there's a credit available to you on them, and you don't have to itemize to get it. But since you live in a state without income tax, you'll be able to deduct the sales tax if you itemize. That was supposed to expire this year, but congress put it back in week before last, so I don't think the exact rules are out yet.
If you itemize, then charitable contributions can also be deducted.
There are a number of other items that can be deducted if you itemize - read through the instructions for Schedule A at http://www.irs.gov/pub/irs-pdf/i1040.pdf and see if anything catches your eye.
And by the way, doing the long form isn't as complicated as it sounds. It'll take you longer than doing the 1040EZ, but will be time well spent.
2006-12-19 03:33:33 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
Sounds like a 1040 or 1040A while itemizing your deductions would be your best bet if you've paid enough interest on your mortgage. Your medical expenses are deductible in excess of 7.5% (I'm pretty sure that's the percentage without looking it up) of your gross income. The only possible advantage to having bought your vehicles is being able to write off the sales tax you paid on them as you have no state taxes.
Try reading Publication 17 on the IRS website.
www.irs.gov
If your
2006-12-19 02:41:00 · answer #2 · answered by koral2800 4 · 0⤊ 0⤋
The mortgage on your house is a deduction that you want to itemize. The Real Estate Taxes that you actually paid in 2006 are itemized. (That means that you have to pay the tax bill before December 31, 2006.)
The cars cannot be itemized, UNLESS one or both of them is a qualifying "hybrid". If so, then there is a set deduction.
The medical bills may be able to be itemized.
You may want to run your taxes through a free on-line program, however my advice for new homeowners is to have your taxes done by a professional, at least for the first year.
Hope this helps
2006-12-19 02:42:20 · answer #3 · answered by deerslyr_71 3 · 0⤊ 1⤋
It sounds like you should itemize. Check out www.irs.gov and go to forms and publications and find the instructions for form 1040, schedule A, B, etc. Then go to the pages in the instructions for Schedule A. Read this section. CAUTION: The congress just announced they reinstated the sales tax deduction, therefore, it will not appear on the IRS forms yet. Then new forms should come out soon so check back for updates.
2006-12-19 03:40:21 · answer #4 · answered by Dana B 2 · 0⤊ 0⤋
if he did no longer owe taxes for the years he did no longer document he will have the potential to get his refunds. better than possibly at his age, he replaced into taxed at a intense sufficient value that he might get a refund except he made a substantial volume of money tell him to get on it. If he does owe - the undertaking will in basic terms get larger and better through fact outcomes and expenses accrue at a awful value. he's possibly basically apprehensive approximately no longer something and basically needs to make the leap and do it. He ought to pass to H&R Block - they might do it for him and that they've considered this all in the past so there's no must be embarrassed.
2016-10-15 05:54:09 · answer #5 · answered by Anonymous · 0⤊ 0⤋
it would be best for you to have an accountant do it. you'll never do it right yourself because you have a lot of deductions. for example, did you know that all of your interest on your mortgage is tax deductible? and in the first year most of your mortgage payment is essentially 98% interest. That means you get money back on most of your mortgage payment. if you do your taxes yourself, you'll never do it correctly. plus, you can get a credit for medical expenses only if it is more than the standard deduction.... the cars you can't right off unless you are self employed and i don't think you are cuz you file a 1040. so do yourself a favor and pay and accountant to do your taxes.
2006-12-19 04:54:15 · answer #6 · answered by nadine 2 · 0⤊ 2⤋
It sounds like you want to itemize deductions. You have to file the 1040 to do that. I linked below an IRS page that is supposed to help determine which for to use.
2006-12-19 11:58:20 · answer #7 · answered by STEVEN F 7 · 0⤊ 0⤋
If you have mortgage interest, high sales taxes (incl. for the cars) and high medical bills and high property tax, you will want to itemize your deductions.
You can do your tax return online, or you can buy TurboTax or TaxCut software and it will walk you through the tax return and probably do it better and certainly cheaper than a tax preparer. HR Block is $10 to do your taxes online: https://taxes.hrblock.com/
TurboTax is $15 http://turbotax.intuit.com/
2006-12-19 02:39:31 · answer #8 · answered by Anonymous · 3⤊ 0⤋
Long form...time to reap the wonders of home ownership.
As for the vehicles....consumer interest is not deductible.
If you have someone do it...take everything with you...including any home improvement costs and reciepts.
if you do it yourself...better read all the instructions and rules and if there are any questions...you should consult the IRS hotline or check their web site.....if in doubt..have someone else do it....cuase if you make mistake...you will pay dearly.
2006-12-19 02:40:14 · answer #9 · answered by Anonymous · 0⤊ 1⤋
You have lots to write off so you would definitely use the long form, also find a good tax guy to help you out. good luck to you.
2006-12-19 02:39:41 · answer #10 · answered by Dolly J 3 · 0⤊ 0⤋