What is the name of your state? New York
I'll try to be brief, but I have 2 issues with questions:
My husband and I bought our first home in April of this year, so this is the first year that we will be able to itemize our deductions. We received our year-end statement from our mortgage company yesterday with the tax form attached (can't remember the number) listing our mortgage interest, points, and taxes paid this year. The points and interest amounts are correct, and the taxes paid is the amount that was paid out of our escrow account for school taxes in September.
My question is: At closing, we paid the seller for 8.5 months of town/county taxes (April 17-Dec 31) and 4.5 months of school taxes (April 17-Aug 31) that they had previously paid. Do we get to deduct the amount we paid the sellers for these taxes at closing (in addition to the school taxes we paid in Sept that is on our statement)?
Also, in September, I started my own business selling Princess House crystal. I know that to qualify for the home office deduction, the space has to be used exclusively for your business, which is not the case with our home office, as my husband and I each have a computer in the office, and I do use my computer for personal things (although about 75% of my usage is for Princess House). However, I know there is an exception when you store inventory - although I am not real clear on the rules for that. We have a spare bedroom where I have my fax machine, and shelves on which I store product samples, hostess gifts, and printed materials (catalogs, order forms, etc). The room has a twin bed in it, in case we have an overnight guest, but it is rarely used for that (especially now, since I have catalogs and samples ON the bed - my husband says it looks like Princess House exploded in that room ). Anyway - would this room classify as inventory storage and be exempt from the "exclusive use" provision of the home office deduction?
Also, I purchased a new computer (incl. a monitor and printer) shortly after I started my business because my old one was on it's last leg. I also purchased my fax machine to submit orders to Princess House. I bought the Home and Business Premier edition of Turbo Tax, and when I input the computer and fax machine for depreciation purposes, in addition to the business use %, it asked me if I wanted to take an "additional 30% depreciation" on new assets. I majored in accounting, and am an accounting analyst (though I don't work with fixed assets), and I am not familiar with this additional depreciation concept. Is this new? Is it something only available to small businesses (hence why I have not heard of it before)? Is this something that would be beneficial for me to take?
Any help would be MUCH appreciated. Thanks in advance!
(Sorry this is so long....)
I'll try to be brief, but I have 2 issues with questions:
My husband and I bought our first home in April of this year, so this is the first year that we will be able to itemize our deductions. We received our year-end statement from our mortgage company yesterday with the tax form attached (can't remember the number) listing our mortgage interest, points, and taxes paid this year. The points and interest amounts are correct, and the taxes paid is the amount that was paid out of our escrow account for school taxes in September.
My question is: At closing, we paid the seller for 8.5 months of town/county taxes (April 17-Dec 31) and 4.5 months of school taxes (April 17-Aug 31) that they had previously paid. Do we get to deduct the amount we paid the sellers for these taxes at closing (in addition to the school taxes we paid in Sept that is on our statement)?
Also, in September, I started my own business selling Princess House crystal. I know that to qualify for the home office deduction, the space has to be used exclusively for your business, which is not the case with our home office, as my husband and I each have a computer in the office, and I do use my computer for personal things (although about 75% of my usage is for Princess House). However, I know there is an exception when you store inventory - although I am not real clear on the rules for that. We have a spare bedroom where I have my fax machine, and shelves on which I store product samples, hostess gifts, and printed materials (catalogs, order forms, etc). The room has a twin bed in it, in case we have an overnight guest, but it is rarely used for that (especially now, since I have catalogs and samples ON the bed - my husband says it looks like Princess House exploded in that room ). Anyway - would this room classify as inventory storage and be exempt from the "exclusive use" provision of the home office deduction?
Also, I purchased a new computer (incl. a monitor and printer) shortly after I started my business because my old one was on it's last leg. I also purchased my fax machine to submit orders to Princess House. I bought the Home and Business Premier edition of Turbo Tax, and when I input the computer and fax machine for depreciation purposes, in addition to the business use %, it asked me if I wanted to take an "additional 30% depreciation" on new assets. I majored in accounting, and am an accounting analyst (though I don't work with fixed assets), and I am not familiar with this additional depreciation concept. Is this new? Is it something only available to small businesses (hence why I have not heard of it before)? Is this something that would be beneficial for me to take?
Any help would be MUCH appreciated. Thanks in advance!
(Sorry this is so long....)