Archive for June, 2021

Are You Planning To Sell or Buy A Home???

Thursday, June 10th, 2021

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

In the past several months the prices for new or existing homes has increased non-linearly!  It seems as if everyone wants to take advantage of the situation.  You have probably already read or heard about others who have been caught unprepared.  They sold their existing home the same day that it came on the real estate market for more than the “Listed Price”, but they were unable to find a new home in their price range.  Now they’re “Renters” for an unplanned period of time.

In my opinion, a home provides three benefits to the owners – 1) an “investment” with tax advantages for mortgage interest & property taxes, 2) a place to live and enjoy for the owners, and 3) a place to enjoy and share great times with friends, family, business associates, etc.

In many or most cases, IF you meet the Federal requirements below, you can exclude up to $500,000 in the taxation of capital gains when you sell your home.  This is for married couples who file a joint income tax return.  Single taxpayers and married filing separately can exclude up to $250,000.  Accurate, written records are absolutely essential.

The formula to be used for reporting the sale in Schedule D (Capital Gains & Losses) of your tax return is:  Original Purchase Price + All Capital Improvements While You Owned The Home = Your Cost Basis.  Then the Selling Price Less your Cost Basis Less the Selling Costs = Your Capital Gain.  Keep all written records especially the Housing and Urban Development HUD-1 form. Capital Gains, if any, are taxable.  Capital Losses are not deductible, but they are reportable.

Contact either the title firm or the law firm that conducted the sale of your home.  Ask if you will receive a Federal Form 1099 S. (About Form 1099-S, Proceeds from Real Estate Transactions | Internal Revenue Service ( ).  The financial information in your Schedule D must agree with the financial data in this form that has already been reported to the Internal Revenue Service!


Are You Paying The Correct Amount of Income Taxes Each Quarter????

Tuesday, June 8th, 2021

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

The Federal and state income tax systems are structured on a “pay-as-you-go” basis.  This means that everyone is expected to have deposited one-fourth of their ESTIMATED annual tax liability each and every quarter.  This can be accomplished by at least two different methods 1) payroll deductions on your behalf by an employer, or 2) making quarterly “Estimated Tax Deposits”.  You can also use any combination of these two methods as long as the end result is achieved.  You can also use the “Electronic Federal Tax Payment System”, which is both free and accurate – Welcome to EFTPS online 

To permit you to continuously calculate and update your annual projected tax liability for the year, throughout the year, you can use the soft copy of your last filed-and-accepted tax returns to perform the calculations for you – 1) open the filed-and-accepted tax return file, 2) save it as a new and different file name, 3) enter the financial data for the current tax year, 4) divide the annual “tax liability” by four, 5) save the file for future reference.

If you do not meet the Federal guidelines, there could be interest and penalties.  However, you will need to complete Federal tax form 2210 to make this determination ( 2020 Form 2210 ( )  IF your monthly and quarterly income was not relatively even throughout the year (i.e. you received a large salary bonus, you were promoted and also received a salary increase, you sold investments, or you received your “Required Minimum Distribution” (RMD), etc) you can use the same form to “annualize” your estimated income for the current tax year.

The IRS does have “Safe Harbor Rules”

The estimated safe harbor rule has three parts:

  • If you expect to owe less than $1,000 after subtracting your withholding, you’re safe.
  • If you pay 100% of your tax liability for the previous year via estimated quarterly tax payments, you’re safe. …
  • If you pay within 90% of your actual liability for the current year, you’re safe.”


Identity Theft – Prevention & Reporting

Tuesday, June 1st, 2021

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

“Identity Theft” is a global problem that is not expected to decline or even be eliminated.  Truly said “An ounce of prevention is worth far more than a pound of cure”, or rectification.  From

Identity (ID) theft happens when someone steals your personal information to commit fraud. The identity thief may use your information to apply for credit, file taxes, or get medical services. These acts can damage your credit status, and cost you time and money to restore your good name.”

You must always be proactively engaged in the monitoring of all of your financial accounts, loans, invoices or bills for items that you did not authorize, or purchase, unexplained notifications from lenders for loans for which you did not apply, or unexplained debt collection calls.

Should you become the victim of Identity Theft, you should immediately contact your local law enforcement offices and the Federal Trade Commission [ Identity Theft Recovery Steps | ].  Again, from

” Freeze your credit files with EquifaxExperianInnovisTransUnion, and the National Consumer Telecommunications and Utilities Exchange for free. Credit freezes prevent someone from applying for and getting approval for a credit account or utility services in your name.”

You may also experience similar problems with your tax returns and the Internal Revenue Service.  However, there are some actions that you can take now to possibly avoid this situation: