By John E. Girouard, Contributor

If you think your taxes are too high, you might be right, but don’t be so quick to blame Washington, or the percenters—be they the 1, the 47, or the 99. You could be sabotaging your financial goals by making a couple of common tax-related decisions that seemed right at the time, but could come back to haunt you later. Examples facing a growing number of people these days are the second home/rental income property and the home-office tax traps. Starting in the late 1980s, many families bought or built second homes in vacation spots, covering the overhead by renting them out during the high seasons. As owners of income property, they deducted the expenses of maintenance, mortgage interest and depreciation of the structure. For years they enjoyed their off-season vacations, paid the mortgage out of rental income, and got a tax break, all while building equity in an appreciating asset. Now that more people are reaching retirement age with accounts upended by the Great Recession, an expedient solution is to sell the vacation home and sock away the cash. But many people are discovering that they unwittingly planted inside their financial plan a tax time bomb. If you’ve owned a rented-out vacation home and claimed the deductions you were entitled to for two or three decades, you could be in for a ugly shock. Older couples who thought they were building a secure nest egg are discovering that a chunk of the equity they thought they had will be eaten up IRS depreciation recapture rules that impose a tax on the accumulated depreciation deductions they took for all those years. With the decline in home prices, it’s possible to sell a rental vacation property at a loss but still owe the tax collector a bundle. Plus, you’ll likely be paying that bill with income dollars that have already been taxed—a case of taxation duplication. The home-office deduction is another nasty surprise awaiting the millions who joined the ranks of telecommuters and entrepreneurs who took deductions for business use of their residences. If you claimed 20% of your home for your office, you could deduct 20% of the cost of maintaining the house and the depreciation. But when the house is sold, the IRS will have its hand out for its share under the Unrecaptured Section 1250 Gain rule, which imposes a special 25% tax. If you were paying attention, or were lucky, and stopped claiming a home office several years before selling the house, IRS rules may let you off the hook. But not everyone has the luxury of waiting. Special Offer: If you’ll be paying for college anytime in the next decade, don’t miss this free report. There are many moves you can make today to lower college costs and increase financial aid options. Find out how in 12 Insider Tricks to Pay For College. Read it now FREE. In addition to tax time bombs, there are other hidden costs associated with taxes that most people are oblivious

From: http://www.forbes.com/sites/investor/2013/04/12/hidden-tax-time-bombs-that-sabotage-retirement/