Welcome to the 2022 Tax Season!
January 24th is fast approaching so now's the time to get your income tax documents in order.
Yes, it's income tax season!
For some, it is a happy time because they expect to receive a refund of a portion of the taxes they paid throughout the previous year (2021). For others this is a time to pay the government the amount of taxes we owe Uncle Sam.
Income tax season is the perfect time to maximize your savings for buying a home. Instead of buying a car which traditionally loses its value over time, consider buying your first home which increases in value over time. You begin building equity when you buy a home. With the equity value in a home, you are building v
alue in an investment. And the tax deductions that become available to you as a homeowner will reduce your income tax bill substantially.
Once we have gotten a few tax definitions out of the way, you can better decide what you can do with your tax return to help you reach your dream of homeownership.
Let’s pause to review what an income tax return really is and what a tax refund consists of.
1. An income tax return is a declaration of personal income earned annually to government or taxing authorities. Returns are filed with either the federal, state government, or both entities.
2. An income tax return is used as a basis for assessing an individual’s liability for unpaid taxes or for receiving a refund of income taxes paid. A refund is a return of excess taxes paid during a given tax year such as 2021.
3. Federal tax returns must be filed every year for an individual or business that received income during the previous year, whether through regular income (wages), interest, dividends, capital gains, tips or other forms of profit.
4. Governments impose an income tax on an individual’s or a business’s financial income.
6. Income tax funds are a key source of revenue that the government uses to fund its activities and serve the public.
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