Consult Your Tax Professional
The Importance of Consulting your Tax Adviser
To the majority of us, understanding taxes is like attempting to read something written in a foreign language; it’s confusing and oftentimes stressful. So it comes as no surprise that you’ll hear many people, including your realtor, say “consult your tax adviser” when it comes to any questions pertaining to real estate taxes. It’s important to note that the arrival of 2015 brought several tax changes with it, making it more important than ever to consult your tax adviser. This is because these changes could truly impact your next real estate transaction. Here are just a few of the new tax changes you should be aware of before completing your next real estate transaction in 2015:
- Mortgage Forgiveness Tax Relief Act: Extends a tax relief to those who went through a short sale in 2014.
- Federal Tax Brackets have changed: This may affect the incremental tax benefit for home owners beginning in 2015.
- Estate Taxes have been reinstated: This could potentially affect those selling real estate property as part of an inheritance.
- Phase out of the Kansas Mortgage Registration Tax: Reduced tax burden on new mortgages beginning in 2015. This is being replaced by changes in recording fees.
- Increased Recording Fees: In order to make up for some of revenue lost in the mortgage tax, mortgage fees have increased (effective January 1st, 2015). The “average” recording fee, previously $60, has risen to $196. It’s important to note however that the recording fee is capped at $125 for mortgages that are under $75,000.
While it seems Missouri has been spared in 2015 with regards to tax changes, it’s important to note that there are several bills on the table that are up for consideration this year. Check with your tax advisor for more information regarding these bills.
Home ownership, both as a primary residence and as an investment, continues to be an effective means to minimize tax obligations and to build wealth. Call me to talk about how you can better take advantage of this benefit for all of your real estate needs!