Tax Planning

1.  CAPITAL GAINS

 

SELLING YOUR HOUSE FOR A PROFIT?

Congratulations! If you’ve lived in the home for two of the past five years and are married, you get to keep up to $500,000 profit free of federal tax; singles keep up to $250,000 tax free. If your profit level exceeds the limits, you can then deduct costs for improvements and closing fees before paying tax on the excess. This is important to know with home prices appreciating at exceptionally high rates over the past few years.

 

But what if you haven’t lived in the home for two of the past five years. Can you still catch a break?

Believe it or not, you may be eligible for a prorated tax break on the gains, based on the amount of time that you were in the home. You will likely qualify for this tax break if you had to sell due to “unforeseen situations”. What qualifies as an unforeseen situation? Things like needing to sell because of a job loss, illness, disasters, multiple births from a single pregnancy, and even divorce.

As always, be sure to consult a tax professional about your individual situation.

 

2. NEW HAMPSHIRE PROPERTY TAXES

 

Understanding the New Hampshire Fiscal Tax Year

             

a. The TAX YEAR runs from April 1 to March 31.

 

b. New tax rates in New Hampshire are set in the Month of November.

          The bills are then calculated and sent out to property owners of record (as of April 1st that year)*. 

 

c. The tax bill is due one (1) month from the billing date.

                 Late payments will be assessed interest at a rate of 12% unless they have gone to “tax lien” when they begin paying 18%. 

 

d. New Hampshire Towns will bill the taxpayer in one of the following manners (each town may be different): 

 

Annual Billing

Due December 1st

Semi-Annual Billing   

Due July 1st (covering 4/1 to 9/30)

Note this bill equals half of the previous year’s total.

It is merely an estimated tax based upon the prior year tax rate.

                                                                            

Due December 1st (covering 10/1 to 3/31)*

Note this bill is calculated at the town's New (revised) Tax Rate.

 

*Assessed Value (per thousand of the value) minus July’s payment.  (This increase/decrease is retroactive to 4/1, when the tax year began).

Quarterly Billing

Due April 1st (covers 4/1 to 6/30)

Due July 1st (covers 7/1 to 9/30)

Due October 1st (covers 10/1 to 12/31)

Due December 31st (covers 1/1/ to 3/31

 

*Assessment figures are based upon the value of the property as determined on April 1st that tax year and are retroactive to that date.

New Construction – On new Construction always ask the tax collector what the most recent tax rate was and what the “equalization” figure is (which is a/k/a “per what % of the assessed value”).  The rate given by the tax collector will often be for raw land.  This amount must be paid in full even if it is on the entire subdivision.  If it is not recognized as a separate lot by the Assessor’s office we must confirm the “parent Lot” is paid to date otherwise it is a potential title issue.