Taxes
Let's get personal at first, then we'll get real.In my general tradition I have finished my personal federal and DC taxes in the last week of February. I sort of did my federal taxes during the blizzard of 2010, but as always, there are forms and papers that trickle in the mail reminding me of donations and income I've completely forgotten about. But once you've done your federal taxes you can file your DC individual taxes on-line, for free. To do so you will need your federal Adjusted Gross Income (AGI) you entered on your 2008 DC tax return (form D-40EZ, line 3 or form D-40, line 3). If you didn't file last year in DC then you can't use the on-line feature. A quick review of my taxes (I used H&R Block's software) shows that I could have donated more to charity, and put more in my retirement plan.
My biggest tax break came from real estate. I paid somewhere around 11K or 13K in mortgage interest, which knocked about 2K off in personal taxes. Maybe I can use that savings to make up for the noticeable jump in real estate taxes levied by the District.
If you haven't got your assessment, be prepared. You know that 10% cap? Yeah, forget about it. There's now a minimum tax floor, 40% of the assessed value of the home. Not even the senior citizens' are safe. I noticed they're getting hit with the same floor, so not so great news for granny. But on the plus side, it does make some problem houses have an incentive to sell.
My own feelings about it are mixed. I liked having a lower tax rate because I bought before the RE boom but at the same time the low tax was like a pair of golden shackles. The tax was a great incentive not to even think of moving. But as certain things in my life change, and I can anticipate that my housing needs may change, making the tax difference from one house to another a minor factor, frees me up to ponder living elsewhere, even if that elsewhere is down the block or off in PG.
Labels: real estate, taxes
posted by Mari @ 1.3.10
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