- If you did a short sale or a loan modification, you will not have to pay taxes on the reduction, provided it happens before January 1, 2014, when the provision expires.
- Homeowners can continue to deduct mortgage insurance premiums through 2013, provided your income is less than $110,000. That’s retroactive for 2012, by the way.
If you earn more than $250,000 (or $300,000 for couples), well, your itemized deductions have been limited – and it varies by income.
For example, if you earned $251,000, your itemization is reduced by $30.00. If you earn $300,000, you would reduce your itemization by $1,500…and so on.
Capital gains that put you over $400,000 in income will be taxed at 20% instead of 15%. The exception is the sale of your principal residence – the first $250,000 in profit if you’re single or the first $500,000 if you’re a couple are still exempt.
As for your kids, well, you can leave an estate up to $5 million ($10 million for families) and they won’t pay any tax. Whatever you leave above that will be taxed at 40%.
So, that’s the update for now; stay tuned because you just never know what those crazy rascals in Congress will do next. Taxes seem to be a moving target these days.
*Thanks to the knowledgable folks at VAR for putting this information together for all of us.