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I received a letter from the IRS on March 2nd saying that they were reviewing my return, and if I haven't heard from them in 45 days I'm supposed to give them a call. Today was the 45 day mark, I called up the IRS, and I was told a request to either contact me or release my refund had been sent to the servicing department that was reviewing my return. I have to wait 30 days to hear back from them.
I guess I'm being audited, but I haven't been contacted by anyone or asked for any information since I received the letter. I don't even know what the issue is with my return. I contacted an accountant, who said he'd never heard of anything like this and that all I could do was to sit and wait. So should I just twiddle my thumbs and do nothing?
I paid legal fees this year (2011) when I go to file, how will this affect my refund? Let's say it's $1000 for the sake of math, and let's say on average I get back between $600-1000 in taxes, how will it affect that?
Assuming your legal fees were deductable (business, investment, etc), then you'll get a deduction. How much that puts in your pocket depends on your tax rate, not the amount you usually get back. If your last dollar of income was taxed at 25%, you'll add $250 to your refund, if it was taxed at 35%, you'll get $350 more back.
quick reference tax tables for all the single ladies (and dudes):
$8,375 - $34,000
$837.50 + 15%
$34,000- $82,400
$4,681.25 + 25%
$82,400- $171,850
$16,781.25 + 28%
$171,850- $373,650
$41,827.25 + 33%
$373,650 And Over
$108,421.25 + 35%
Another question. Let's say I bought an item at auction for charity, I can deduct how much I "overpaid" for the item based off the base item cost as a charitable deduction, correct? That's what I've been able to turn up from the IRS website. For instance, if the item was $50 from a vendor, but I bought it as a charitable donation for $120, I could deduct $70 as a charity donation on my taxes right?
1. Is the property tax cap in Indiana applied after your deducations (mortgage, homestead, and Indiana has a state supplemental homestead) or before?
2. My escrow information shows PMI, Homeowner's Insurance, and County Tax estimates. Am I correct in assuming that these do not include state property taxes?
After reading this, I'm pretty sure that the property tax cap is calculated on the gross value, which is before the deductions. It's then applied at the end. So in the example at the bottom of the page, if the tax owed based on the net assessed value of $20,270 were $2,500, you'd get a credit of $500 (assuming the 2% tax cap).
As for #2, it's tough to say. Do you get a breakdown? On my property tax bill I get every year, it shows how much applies to each thing (school district, county, state, fire district, etc.). Granted, this is for Washington, and I'm sure every state is different.