Taxes and Tax Information

A real estate transfer tax is a one-time tax paid at the closing of a property, and is considered a stream of revenue for state budgets. This transfer tax though, once collected is not generally used for housing-related purposes. The tax is based on the value of a property as agreed to by the parties in a real estate contract.

In the excitement of selling or buying a home, often the real estate transfer tax cost is overlooked. Depending on locale, either the buyer or seller pays the tax at closing or escrow, but beware in New Hampshire both the buyer and seller pay, half of 1.5%!. In some states it can be a formidable amount, you should be prepared for what the transfer taxes will be, and who pays them, before you start a home search or list your home for-sale.

The good news is, thirteen states don’t have a real estate property tax. They are: Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, and Wyoming.

The bad news is that the remaining thirty-seven states and The District of Columbia charge taxes on the transfer of a property. The tax is only levied once when a property is exchanged between parties, unlike general property taxes which are paid annually and are based on the assessed value. Real estate transfer taxes range from a low of .01% in Colorado to a high of 1.28% in Washington state.

Variations on transfer taxes include; in Arizona only charges a tax on deeds. However Alabama and Florida charge on deeds and mortgages. To avoid financial surprises, inquire early as to who pays (buyer or seller) and how much transfer taxes will be. Some states dictate who pays the tax, and some just want the tax paid. This cost can typically be negotiated between the parties. Consult an experienced real estate attorney.

A handy online link for transfer taxes for all fifty states.

http://www.parealtor.org/content/AssetMgmt/Issues Resource Center/Realty Transfer Tax/Transfer tax chart.pdf

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Tax season can be a very stressful time for many people. It can be frustrating trying to understand complex tax codes, deductions and earned income credit. Some people become so intimidated by their taxes that they simply chose to ignore them. Although this can be a tempting solution, it is never the right answer.

With a little common sense, a calculator, a few hours and a pot of coffee, you can file your own taxes from the comfort of your own home with very little stress. It is really not as difficult as you think and can actually have quite a few advantages.

The first thing you should do is decide how you will be filing your taxes. Will you file taxes online? Will you go to an accountant? Perhaps you will use the free e-file programs that are available. Filing taxes online is rapidly becoming the most common way of filing taxes. Even if you go see a tax professional, they are likely to file your taxes online because the process is quicker. In addition, those who file online typically receive a refund quicker than those who file through regular mail. Many tax preparation software packages include the option of storing your information from last tax season which allows you to quickly complete information that hasn’t changed.

There are some things to remember when filing your taxes online. First, you will want to read your W-2. Find out what each of those boxes mean and be sure to read the back of your W-2 as well before you begin. You will want to print out copies of your tax forms, even when you file them online, for your records. Most online filing services will provide you with a confirmation that the IRS has received your taxes. You will want to print that out as well.

Online tax filing programs typically will offer tax advice as you work through the programs. It is a good idea to go through the tax information that is given, even if you do not think it applies to you. You might be surprised by something you are able to deduct or an additional credit you are able to claim. That is one advantage of opting to file taxes online.

The IRS website, in addition to offering a tremendous amount of tax information, will provide you with different options you have to file taxes for free. There are different criteria for each organization that files taxes for free. You will most likely be able to find one that applies to you. There are also many tax preparers that will file your taxes online for free if you pay them to prepare your taxes for you.
Many commercial software packages allow you to file online for free as well. Once you purchase the software, you can file your federal taxes for no additional cost. Some programs will allow you to file taxes for free in your particular state. Others charge an additional fee.

Filing your taxes online can eliminate a lot of the stress from taxes. The programs have error checkers and calculators built in so you have a much smaller chance of making an error. With so many options to file for free, it is no wonder that many Americans are choosing this route to file their taxes.

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The Democratic Party’s "New Direction for America" could mean more economic solidity, but might also result in higher taxation, according to a recent study.

According to a line-by-line analysis of the program by the National Taxpayers Union Foundation, the plan includes billions of dollars of new spending.

For example, the largest spending program is the "G.I. Bill of Rights for the 21st Century." This program would provide increased pay, health care and benefits for veterans and their families. The cost of the program would increase outlays by $99 billion over the next five years. The top income tax rate would be increased to offset the increase.

In addition to the noted costs, NTUF Senior Policy Analyst Demian Brady noted that there are several "cost unknown" items that would significantly increase the net total spending that the Democratic agenda is seeking. One of these items includes a proposal to screen 100% of all inbound US Cargo.

"Americans should take note that proposals containing many political promises are likely to contain many tax dollars as well," Brady said.

"Given that the average House Democrat’s agenda in the last Congress would have boosted spending by $521 billion, the ‘New Direction for America’ may appear to be modest," he continued. "Many taxpayers, however, are probably hoping that if Democrats take control of Congress, they will somehow find the fiscal responsibility on Capital Hill that has been lost amongst slabs of pork-barrel spending and IOU’s from unfunded program liabilities."

Other major spending plans include a proposal for a savings account system in which the federal government would match dollar-for-dollar the first $1,000 a citizen contributes to a personal retirement plan. This is estimated to cost taxpayers $7.5 billion each year.

The largest item in the spending program is healthcare spending at $28.8 billion. It includes reforms to the Medicare prescription drug program and accounts for 36% of the increases. Other spending includes education increases for teacher recruitment and lower student interest rates.

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