Tax Tips & Updates
The information presented below is general in nature and for informational purposes only. It should not be construed as tax, financial or legal advice. The information is not intended or written by us to be used, and cannot be used, by any taxpayer for the purpose of (i) avoiding penalties that may be imposed on the taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein. You should not take any action without consulting with a professional tax advisor. Please contact us to discuss your particular tax situation before taking any action.
Rental income exclusion
If you rent out your principal residence or second home for 14 days or less, there is no income to report. However, you cannot deduct any expenses associated with the rental.
Home sale gain exclusion
If you meet certain requirements, you can exclude up to $250,000 ($500,000 for joint filers) of gain when you sell your principal residence.
Child and dependent care expense
If you pay somebody to care for your children or dependent under age 13, you may be eligible for a tax credit.
If you, your spouse or your children are in college or are paying off student loan, you may be eligible for a tax credit or deduction.
Health insurance deduction
If you are self-employed, you may be able to deduct the health insurance costs for yourself, your spouse and your dependents.
Capital gains tax
If you have sold some stocks and realized some capital gains during the year, you may want to sell some unrealized losses to offset the gains and minimize your taxes. However, do not overdo it since you can only use up to $3,000 of the net losses to offset your ordinary income each year. In addition, keep in mind of the “wash sale” rule which prohibits you from taking the loss if you buy a substantially identical stock within 30 days before or after you sell the stock.