The tax season has set upon (most of) us. Don’t forget the deadline for filing your 2018 individual tax return is April 15, 2019. Some of you may have already filed your returns. Cheers!
For those of you that haven’t started yet, here are some places that you might want to look for tax deduction/credit.
1. Texas taxpayers can deduct state and local general sales taxes they paid during 2018
Since Texas residents don’t pay state income taxes, this allows them to deduct general state and local sales tax on their federal tax returns. Texas taxpayers can deduct either actual sales tax paid during 2018 or use a default amount determined by the IRS. But, the taxpayer has to itemize in order to take advantage of this sales tax deduction.
2. Mortgage Credit Certificate (MCC)
Good news for some Texas first-time home buyers who bought their homes in 2018. A Mortgage Credit Certificate, or MCC, provides first-time buyers with a dollar for dollar tax credit of up to $2,000 on the interest they pay on their mortgage every year. This certificate must be issued by a state or local governmental units or agencies. Usually, only the taxpayers who itemize can deduct their mortgage interests paid on their tax returns. With a MCC, however, homeowners can take the standard deduction while apply their MCC tax credit to their remaining tax liability. However, this credit is not available for everyone. According to Texas Department of Housing and Community Affairs the program is open to those individuals and families who:
• meet income and home purchase requirements;
• have not owned a home as primary residence in the past three (3) years;
• meet the qualifying requirements of the mortgage loan;
• will use the home as their principal/primary residence.
For further information on MCC, qualified Texas taxpayers may go to www.irs.gov/Form8396 for the latest information.
3. Museum Membership Fee
Some of you may pay membership fees or dues to become members of local museums and/or organizations. My family, for example, pays membership fees to Perot Museum every two years. You may not realize that you can deduct this kind of fees or dues on your tax return. However, there is a caveat. Of course, another caveat. Don’t you love them! you can deduct only the amount that is more than the value of the benefits you receive from the museum or qualified organization.