Thursday, July 26, 2012

Understanding your personal tax portfolio

My friend and I was chatting the other day comparing the purchasing of real estate property back in Asia and here in the United States. We both agreed that purchasing residential property especially in Silicon Valley, California in the United States is no easy task.
We have to work with buyer and seller agents very closely; and sometimes also the underwriter and bank. End of the day, we would need another experienced tax accountant to figure out property tax related to personal income tax. For example, we found out recently about only the interest paid towards the mortgage can be deductible and property tax as well, but only based on the assessed value of the property. Then the guys were saying that we should just take up a professional course in enrolled agent continuing education for tax related issues and figure out our income tax by ourselves, rather than to pay an accountant to do it. In the long term, it really makes sense as we understand our tax portfolio as well. Often, when we engage tax accountant, we blindly leave the tax task to them and gradually, instead of understanding our personal tax portfolio, we actually lose track of it.

So, the first step before taking any course is to check for entry prerequisites, similar to checking the enrolled agent continuing education requirements on their website.