9 Easy Mistakes Home Owners Make on Their Taxes

Don’t rouse the IRS or pay more taxes than necessary — know the score on each home tax deduction and credit.

Sin #1: Deducting the wrong year for property taxes

You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind — that is, you’re not billed for 2013 property taxes until 2014. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in 2013, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #2: Confusing escrow amount for actual taxes paid

If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #3: Deducting points paid to refinance

Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Misjudging the home office tax deduction

This deduction may not be as good as it seems. It’s complicated, often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here’s what to  know about what you can write off.

Sin #5: Failing to repay the first-time home buyer tax credit

If you used the original home buyer tax credit in 2008, you must repay 1/15th of the credit over 15 years. If you used the tax credit in 2009, 2010, or 2011 and then sold your house or stopped using it as your primary residence, within 36 months of the purchase date, you also have to pay back the credit.

The IRS has a tool you can use to help figure out what you owe.

Sin #6: Failing to track home-related expenses

If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits and lender or government statements to confirm property taxes paid.

Sin #7: Forgetting to keep track of capital gains

If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. You can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if you bought a home for $100,000 and sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.

Sin #8: Filing incorrectly for energy tax credits

If you made any eligible improvements in 2012 — or will in 2013 — such as installing energy-efficient windows and doors, you may be able to take a 10% tax credit (up to $500). But keep in mind, it’s a lifetime credit. If you claimed the credit in any recent years, you’re done. Fill out Form 5695.

Part II of the form, which covers systems eligible for a larger tax credit through 2016, such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

Sin #9: Claiming too much for the mortgage interest tax deduction

You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article was original published in Jan. 2011

By: G. M. Filisko

This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.

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8 Kitchen Trends to Watch in 2013

By Melissa Dittmann Tracey, REALTOR(R) Magazine

Photo Credit: HomeThangs.com

Kitchens are a popular spot that home shoppers judge in a home. So what are the trends in the kitchen for 2013?HomeThangs.com, a home improvement superstore, offers up some of the following kitchen design predictions for the New Year:

1. Modern style: Kitchens are getting more modern in style, boasting simplified lines and offering up big, open spaces perfect for entertaining.

2. Tucked-away appliances: Appliances designed to blend in with the rest of the kitchen, like with the same wood of the cabinets, are becoming more popular. Also, some appliances, like undercounter or mini refrigerators or trash compactors, are being tucked away into a kitchen island.

3. Lots of lights: Great lighting in the kitchen is becoming more important, with lighting being layered with a mixture of task lighting and ambient lighting. Under-cabinet LED lights are becoming more commonplace.

4. Supersized kitchen islands: “2013 kitchen design trends are moving away from dining rooms and toward eating, drinking, and interacting in the kitchen itself, and a large kitchen island complete with bar stools is the perfect way to make this happen,” according to HomeThangs.com. this helps to create “a nice open-air feeling – especially if one can be used to bridge kitchen and living areas, another major 2013 kitchen design trend.”

5. Neutral color schemes: The use of neutral colors in the kitchen is on the rise, particularly in shades of grays and greens and a variety of wood tones. Bright colors are being reserved for only small accents in the kitchen.

6. Fancy appliances: Professional gas ranges and induction cooktops are popular kitchen appliances for making a more gourmet kitchen.

7. Decorative range hoods: Trends are moving away from a conventional stainless steel trapezoid-shaped hood to more decorative range hoods. These hoods may have built-in LED lights and are even serving almost like a decorative chandelier for a kitchen island.

8. Glass backsplashes: High gloss is “in” for cabinets, appliances, and backsplashes. A single-sheet, back-painted glass blacksplash is growing in popularity, which are also known for being easy to clean. These glass backsplashes are also reflective, adding a polished decorative touch to kitchens. Glass mosaic tile sheets are also increasing in popularity.

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Have You Filed for Your Homestead Tax Credit? Time is Running Out!

 

The Homestead Tax Credit is intended to provide tax relief to those who own and occupy a home in Iowa.  You Must file an application on or before July 1st of the current year, in order to receive the credit for this year.  If you file after July 1st, you will receive the credit the following year.

To file for this credit in Polk County, you must go to the Polk County Assessor’s office at 111 Court Ave, Room #195, Des Moines, IA 50309.  Call (515) 286-3140 or visit the Assessor’s Website first, to determine eligibility and find out what documents are required.

Other Tax Credits Available are Family Farm, Military & Urban Revitalization Credits ~ Find More Information HERE, and don’t forget to remind your neighbors to claim their savings too!

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Time is Running Out: How the Mortgage Debt Relief Act Can Save You

In 2007, the Mortgage Debt Relief Act was passed in an attempt to help the millions of homeowners who, due to the housing crisis and economic crash, suddenly found themselves in danger of losing their home to foreclosure.

The act gave homeowners relief from the tax responsibility that accompanied forgiven debt or short sales. Often, these taxes would be more than most distressed homeowners could afford.

At the end of 2012, the act will expire and homeowners will miss this once-in-a-lifetime chance to save themselves tens of thousands of dollars while freeing themselves from an unmanageable mortgage.

The clock is ticking, but there is still time to change your financial situation and avoid foreclosure. As a Certified Distressed Property Expert (CDPE), I am uniquely qualified to guide you through your options and help you find the right one for your situation.

Take a look around my site and read the free reports that are available. Write down any questions you have and then contact me today for your free, confidential consultation.

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Des Moines 2nd Strongest Local Economy!

new annual survey ranks the Des Moines, West Des Moines metro area as the second strongest local economy in the U.S.

POLICOM’s report looks at economic strength.

Des Moines has steadily rose to the top of the list from 28th place in 2008 to sixth place last year and now into second place.

POLICOM said Washington, D.C., ranked No. 1 this year.

The survey found growth in the financial and insurance industry helped the Des Moines metro market.

Des Moines ranked just above Seattle, Nashville and Austin, Texas, in the rankings that included 366 metropolitan areas.

“The rankings do not reflect the latest ‘hotspot’ or boom town, but the areas which have the best economic foundation,” said William Fruth, president of POLICOM.  ”While most communities have slowed or declined during this recession, the strongest areas have been able to weather the storm.”

POLICOM Corporation is an independent economics research firm based in Florida that specializes in analyzing local and state economies and economic development.

Read more HERE

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Military HomeOwnership Program Offering $5000

MILITARY HOMEOWNERSHIP ASSISTANCE PROGRAM ACCEPTING  APPLICATIONS BEGINNING JULY 2!

Governor Branstad recently signed SF2336, providing $1.6 million in funding for the Military Homeownership Assistance Program, with no changes to the program rules!

Benefits:

The Military Homeownership Assistance Program provides eligible service members and veterans with a $5,000 grant that may be used toward down payment and closing cost assistance on a qualifying home purchase. Retroactive grants are not eligible.  The financing option of this program is restricted to IFA’s mortgage programs, for eligible home buyers or another fixed rate, fully amortizing mortgage that is lower cost (APR) than IFA’s mortgage program.

Eligibility:

  • Have served 90 days active duty since September 11, 2001. Active duty need not be consecutive; it may be cumulative. Inactive Duty Training, Annual Training and Active Duty for Training may not count toward active duty; or
  • Is a federal status injured service person having served in active duty since September 11, 2001; or
  • Is a surviving spouse of said eligible service person, all who have served honorably.

AND

  • Receives prior approval before closing on a qualified home.
  • Utilizes an IFA Participating or Facilitating (link to Facilitating Lender page) Lender (if financing the purchase).
  • Uses IFA’s mortgage programs, unless a lower cost, fixed rate, fully amortizing option is available if eligible.  If not eligible for 30 year fixed rate financing,  uses a permanent mortgage loan for financing the purchase.
  • The home must be located in the state of Iowa.
  • The home must be acquired for the borrower’s primary occupancy residence

The home must be one of the following:

  • Single-family residences (including “stick-built” homes, modular homes, or manufactured homes, provided the home is attached to a permanent foundation and is taxed as real estate)
    • Condominiums
    • Townhomes
    • Duplexes, if one of the units will be the primary residence of the service member
  • Completion of acquisition/renovation of qualifying home. Refinancing interim mortgage financing of not more than 24 months (at time of new mortgage closing) used for the purpose to construct the residence or renovation of an existing home that has not been occupied by the MHOA applicant, spouse or fiancé.  Remember prior approval to completion and occupancy is required.

Application Process:

Typical forms usually needed to establish military service include a copy of a valid DD Form 214 (Member 4 Form or later), four months of leave and earnings statements or other documentation that may be required, and government issued photo ID.

More Information:

Funding for this program is provided by state appropriation and is subject to funding availability. Assistance is awarded in the order in which completed applications are received. Assistance awarded pursuant to the program is personal to their recipients and may not be assigned. An eligible service member shall receive assistance only once, and only one award per home purchase.

CLICK HERE for More Information on All IFA Programs, and Contact Carrie Today to Get Started!

 

 

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What Moves YOU? Share YOUR Story for a Chance to Win $10,000

What moves us? Happy buyers and sellers! Now it’s your turn…What Moves You? Enter the RE/MAX ‘What Moves You?’ contest and you could win a weekly prize of a $750 Apple gift card and a grand prize of $10k. Visit www.whatmovesyou.remax.com today and tell us your story with a photo or video then get your friends to vote! You could win big!

 

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10 Best Places to Buy Foreclosures in 2012

In its May foreclosure newsletter, RealtyTrac named the top 10 places to buy foreclosures in 2012. The selected locations were out of the 100 largest metropolitan statistical areas based on population. The list was further narrowed according to markets with at least 200 foreclosure-related sales transactions in January 2012. Then, it was whittled down again to only include metros with foreclosure sales prices at least 30 percent below the average price of a non-foreclosure property.

The number one metro to buy a foreclosure in 2012 is Kansas City, Missouri, where the average foreclosure sales price is $73,257 compared to $101,710 a year ago. The average discount for foreclosures is 51 percent. Overall, foreclosures make up 29 percent of all sales in this metro. Citing data from the Kansas City Regional Association of Realtors, the newsletter stated home sales in Kansas City rose 14 percent in March from a year ago, and prices increased 3 percent from a year ago.

Boston earned the number two spot with an average foreclosure sales price of $195,672 compared to $203,606. The average discount is 49 percent, and 18 percent of sales are foreclosures. Boston also had the lowest unemployment rate on the list at 5.9 percent.

Pittsburgh came in at number three. The average foreclosure sales price is $73,142; last year, it was $82,928. The average discount is 48 percent.

At fourth place, Tulsa has an average foreclosure sales price of $86,725 compared to $113,969 last year and also has an average discount of 38 percent.

San Francisco earned the number five spot. A pricey city to own a home, San Francisco foreclosures averaged $307,803, down from last year’s average of $317,409. Discounts for foreclosures are about 38 percent. Out of all sales, 47 percent were foreclosures in San Francisco, the highest out of all 10 cities. Real estate blog Movoto estimated Facebook’s initial public offering will add $1 billion to property values in the Bay Area.

Cape Coral-Fort Meyers, Florida is sixth best place to buy a foreclosure, and averaged at $102,022, with last year’s sales prices at $93,976. Discounts were also 38 percent.

Charlotte ranked number seven and averaged $118,808 for foreclosed homes. Last year, the average was $144,614, also with a 38 percent discount.

Tucson, Arizona was number eight at $112,660 compared to $129,500 last year. The average discount was also 35 percent. According to the Tucson Association of Realtors, sales rose 16 percent in February from a year ago. Also, the average sales price increased 4.75 percent from January to February, according to RealtyTrac.

Seattle foreclosures averaged $212,565, a drop from the year ago price of $237,852. At number nine on the list, the metro had an average discount of 35 percent.

The number 10 spot went to Columbus, Ohio, where the average sales price is $98,223, falling from $101,152 last year. Average discounts were 32 percent.

The newsletter was authored by RealtyTrac staff writer Octavio Nuiry.

Article courtesy of Esther Cho, www.dsnews.com 

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Awesome Buying Opportunity!

Awesome Opportunity to Buy This Home Today and Own for LESS than Rent!

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SEARCHING FOR YOUR DREAM HOME?

Buying a home is one of the largest and most important investments you will ever make. As with any big investment, careful planning and organization are necessary. Let me help you get the best house for your money.  Click Here to begin the process of finding your Dream Home.

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