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Change of tax status?

Old 07-17-06, 12:22 AM
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Change of tax status?

I just bought my first home and now need to change my tax status to get a tax break on the interest I'm paying. I'm pretty much clueless when it comes to this so what's some advice when looking for an accountant? Should I just go to a place like HR Block?
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Old 07-17-06, 12:31 AM
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You don't change your tax status. You might change the number of exemptions on your W-4 to withhold less tax because you won't owe as much tax due to interest expense though. And you'll just report your interest expense on your taxes to take advantage of it.

Do not get tax advice from H&R Block. Ask firends or co-workers for recommendations.
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Old 07-17-06, 05:29 AM
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TurboTax or TaxCut software will lead you through itemized deductions. Probably a better option than going to an H&R Block(head) office.
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Old 07-17-06, 07:36 AM
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Whatever you do, don't go to H&R Block or Jackson Hewitt.

You do not have to change anything as far as "tax status." To deduct your mortgage interest on your taxes, you will have to itemize your return when you prepare your 2006 taxes. You don't have to do anything until then. Just make sure you keep all your records in a safe place.

As OldDude said, TurboTax or TaxCut can walk you through this (personally, I think they're both about equal). If you're not comfortable, find a real accountant to do it for you. Ask your friends and family - chances are someone uses an accountant they can refer you to.
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Old 07-17-06, 07:38 AM
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Forgot to add - you might want to change the number of exemptions on your payroll W-4. The IRS has a calculator that can help determine the proper number.

http://www.irs.gov/individuals/artic...=96196,00.html
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Old 07-17-06, 08:42 AM
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Yeah, it took a few minutes to do the IRS W-4 calculator for me when I bought my house. Changed my exemptions from 0 to 3 or 4, IIRC.
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Old 07-17-06, 09:28 AM
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Be sure to keep all of the papers from closing together and available as well (for when you file this year's tax return). IIRC, there are closing costs that may be deductible, can't remember if this is for the buyer, seller, both, or neither, but I'd keep it all together until you find out, easier than trying to find everything in case it is!
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Old 07-17-06, 10:19 AM
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I was going to say you probably won't have a lot of interest deducted this year as you probably will only have a couple of months payments and it's not going to be large enough to make a huge difference.

Then I noticed you're in San Francisco.
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Old 07-17-06, 10:26 AM
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Originally Posted by Shoveler
Be sure to keep all of the papers from closing together and available as well (for when you file this year's tax return). IIRC, there are closing costs that may be deductible, can't remember if this is for the buyer, seller, both, or neither, but I'd keep it all together until you find out, easier than trying to find everything in case it is!
I think it's just the points you can deduct on purchase loan (refinance points are amortized for tax purposes). Well, and any real estate taxes you had to pay at closing (but not transfer taxes).
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