Sometimes a tax break credit is straightforward, and other times it may be more complicated. For example, a real estate tax credit is pretty cut and dried; it’s more or less exactly what it sounds like. Personal tax is a broad term that could encompass any number of categories.
Real Estate Tax Expense
If you own a home, you can deduct the amount of money that you pay in real estate taxes, also called property taxes from your overall income taxes. You don’t even have to live on the premises in order to claim the deduction; you can deduct the real estate taxes for a vacation home or any land that you own. Even taxes on land that you own in a foreign country is deductible. However, it has to be residential property; you can’t deduct the property tax you pay on land that you own for business. However, it can be claimed as a business expense.
Personal Tax Expense
Personal taxes can refer to any local taxes, such as sales tax, or income taxes that are levied on a statewide basis. In some states, an individual’s yearly income is taxed twice, once by the federal government and once by the state government. In order to make the tax burden a little less onerous, however, the state income tax that you pay can be deducted from the amount you pay in federal income tax. Currently, the amount of local and state taxes you can deduct in a given year is capped at 10,000 dollars as mandated by the Tax Cuts and Jobs Act of 2017. Prior to this, there was no limit on the amount of personal (i.e. state and local) taxes that could be deducted. People who live in states where state income tax is not collected cannot take this deduction.
Rarely do taxes seem straightforward, and with tax laws changing all the time, they are likely to get even more complicated. Fortunately, GovDocFiling is here to help with tax forms such as the EIN number application. You can also peruse this tax ID sample application.