McKinney Personal Tax Preparation

Old McKinney and New

McKinney's households include families who have farmed in Collin County for generations, residents of the Victorian homes near the square, retirees and the many newcomers filling Craig Ranch, Stonebridge Ranch and the eastern subdivisions. Texas has no income tax, so the federal return is the main filing. BOMCAS prepares personal returns for McKinney residents remotely.

Texas homestead and community property basics are on the Texas personal tax page. This page deals with McKinney landowners, pilots and families.

Corporate and Medical Employees

Many residents work for corporate employers along Highway 121, for defence and technology companies, or at McKinney's hospitals and medical offices. They often have stock pay, deferred compensation and health savings accounts. Medical professionals with side practices or locum work report that income on Schedule C.

Landowners and Agricultural Valuation

Land in east and north McKinney is often appraised under Texas agricultural or wildlife use, which lowers property tax substantially. When land is sold for development or its use changes, a rollback tax is due for the three previous years: the difference between the taxes on market value and on the agricultural value. For most land, appraised under the open-space rules, no interest is added unless the bill goes unpaid, and owners must notify the appraisal district of the change of use. Landowners who lease land for grazing or hay report the rent on their returns, and those who farm themselves file Schedule F.

Selling Inherited Land

Land inherited from a parent takes a basis equal to its value at the date of death, which usually wipes out most of the gain built up over decades. An appraisal at the time of inheritance is valuable when the land is later sold to a developer. Sales spread over several years under an installment contract spread the gain as payments arrive.

Aircraft Owners

Pilots who own aircraft based at McKinney National may use them for both personal and business flying. Business use must be documented flight by flight, and only that share of costs is deductible. Aircraft rented to flight schools or clubs produce rental income, often with limited deductions under the passive loss rules.

New-Home Buyers

Buyers of new homes should file the homestead exemption once they live in the home. Some newer subdivisions are inside municipal utility districts or public improvement districts that add their own taxes or assessments, and MUD taxes are deductible as property taxes, while assessments for specific improvements generally are not.

Students and Parents

Collin College has a large campus in McKinney, and many residents study there part time while working. The American opportunity credit is worth up to $2,500 a year for the first four years of college, and the lifetime learning credit helps with later courses. Parents claim these credits for dependent students, and the Form 1098-T from the college is the starting point.

Retirees

McKinney attracts retirees, many from colder states. Social Security may be partly taxable depending on other income, and the additional deduction of up to $6,000 for people 65 or older applies from 2025 through 2028. Required minimum distributions start at 73, and qualified charitable distributions from IRAs can satisfy them tax free.

Bring These

W-2s, 1099s and stock statements.
Grazing or hay lease income.
Records of land sales and inherited values.
Aircraft logs and expenses.
Property tax statements and Form 1098.
Last year's return.