Getting Paid

Posted on February 15, 2007 - Filed Under Business |

TaxGuy:  Hello Clifford.  Are you happy to be doing your taxes again?
Clifford:  Yes sir!  It’s time to get paid!

Last year, my excitement could barely be contained when doing my taxes.  This year was no different.  Well, it was slightly different.  I was more prepared.  My expenses were neatly tracked on a simple Excel spreadsheet.  One goal for this year: upgrade to Quikbooks.

During my session with TaxGuy, I did learn something I would like to share with the class.

The maximum deduction one can take for a rental property is $25,000 per year.  The good news is if the total deductions are over $25,000 then the balance can be applied towards the future.

Example: 

It’s 2006.  You have $33,000 in write-offs.  The maximum that can be deducted is $25,000.  $33,000 - $25,000 = $8,000.  The $8,000 can be carried forward into the future.

Let’s say that in 2007, you only have $17,000 in write-offs.  You can apply the $8,000 from 2006 to the write-offs of 2007.  $17,000 + $8,000 = $25,000.

I don’t know if there’s a theoretical ceiling, with how much cumulation of write-offs you can carry forward.  If you have $10,000 per year in carry-overs, after 10 years would that total $100,000 in write offs?

That’s why I pay TaxGuy.  He can worry about that. 

I was able to write off Barron’s.

Can you keep a secret?  I was able to write-off this blog . . . shhhhhhhhh!

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Comments

4 Responses to “Getting Paid”

  1. Trisha on February 17th, 2007 4:19 pm

    Hey, Clifford, how the heck do you write off a blog? Do tell!

  2. Clifford on February 18th, 2007 3:58 pm

    Trisha, you were suppose to keep it a secret!! :)
    For Typepad, I actually pay for this service. And because it is classified as a real estate blog, I’m able to write off the expense as if it was a real estate newsletter subscription.

  3. Trisha on February 19th, 2007 2:34 pm

    Ooooooooh…. See, I’m too cheap for that! LOL!

  4. Clifford on February 19th, 2007 7:13 pm

    And Trisha comes out swinging!

    Well, not all of us have a second career as a swim suit model. :)
    I’m getting 40 cents back on the dollar. I’ll take that all day long! :)

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