Tax Deductions: 6 Mistakes That Homeowners Make

Get every single one of the tax deductions you’re entitled to without the fear of making mistakes that’ll bring the tax man to your door.

Hooray — it’s tax time! OK, few people get quite that excited about filling out government forms, but there’s good reason to appreciate the annual ritual. Tax deductions are a serious perk for homeowners, and they can be a major boon to your family’s finances.

But unless you’re a CPA, it can be easy to miss these deductions, or worse: raise a red flag with the IRS because you got deduction happy. Here are the top six homeowner tax blunders accountants see the most.

1.  Missing the Mortgage Interest Deduction

Itemized deductions can be a great way to lower your tax bill. But homeowners, particularly newbies, may be used to claiming the standard deduction because they haven’t had enough of the expenditures that qualify them for itemized filing.

You can deduct the interest portion of your mortgage payments. That might mean your itemized tax deductions will now exceed the standard, saving you tax dollars.

The savings are at their maximum early on, when most of your mortgage payments go to interest, not principal. Over the years, the balance shifts, and for some it might seem that they lose the itemized advantage. But there’s a way to keep the savings maximized.

The trick is to use an alternating approach to filing, according to Chris Hardy, a certified financial planner with Paramount Investor Advisors in Suwanee, Ga. One year you maximize every tax deduction you can, including MID, and prepay whatever you can for the next year, such as property taxes and charitable contributions. The next year, you take the standard deduction. Overall, says Hardy, you may end up saving more money.

2.  Assuming Everything House-Related is Deductible

Tax deductions are great, but you can’t write everything off on your taxes. And to stay in the good graces of the IRS, you don’t want to over-deduct.

Talk to your accountant or tax preparer to be straight on allowable tax deductions, which, for a homeowner, generally means mortgage interest and real estate taxes. You may also deduct points charged on the mortgage in the year you purchased the home.

Related: How — and When — to Deduct Mortgage Points

“A lot of people will try to take homeowners association fees or condo association fees as tax deductions even though it’s not an allowable tax deduction,” Hardy says. “I see them try to deduct keeping up the yard as an expense.”

Although claiming unallowable deductions might not immediately flag you for an audit, according to Hardy, if you do get audited for something else, the IRS will look to see what else it can find. The result could then be back taxes, interest, and penalties. And the IRS will likely check as many back years as it legally can.

3.  Neglecting Your Home Office

Many people fail to take the home office tax deduction for fear of being audited, or because it’s just plain hard to calculate if you don’t use the newer, simplified method. (More on that math-saving gem later.) However you compute this tax deduction, it’s a great way to save some cash.

To qualify for the tax deduction, your office space must be used regularly and only for business. If you work for someone else, says Hardy, there has to be documentation — it could be an email from a supervisor — that your work at home is required as part of the job and is for the employer’s convenience. In addition, employees can’t take the tax deduction if they rent any part of their home to their employers and use the rented portion to perform work for the employer.

If your use is legitimate, you can deduct a proportionate amount of a number of expenses, including insurance, repairs, utilities, services, and depreciation, which can really add up. Or you can use the uber-simple method of multiplying the square footage of the office by $5 for your total deduction. Check IRS Publication 587 for details.

And, better yet, if the home office is your base of business, you may get additional tax deductions from your business income, such as mileage for driving to and from your clients’ locations because now it’s considered a business expense rather than commuting.

Related: 12 Tough Questions (and Answers) About Home Office Deductions

4.  Understanding Rental Income

Renting out a room or wing of your house on Airbnb can be a fun way to meet new people and make extra income. It can also have several important tax implications.

When renting out a room in your personal residence, says Greg Freyman, managing partner with Freyman CPA in New York City and Westwood, N.J., the amount of mortgage interest and real estate taxes you can claim as itemized tax deductions changes. You can only deduct MID and real estate taxes for the portion of the house that isn’t rented. So, if you have a 2,000-square-foot house and rent out a room of 100 square feet, you can deduct 95% of the mortgage interest and taxes on Schedule A.

However, because the rented space is now converted to investment property, you can also take deductions on your rental expenses. Some examples are the rental area’s portion of overall maintenance and utilities, again calculated by the percentage of overall square footage.

But (there’s always a but when it comes to taxes) you can only claim those rental expenses for the time period you rented the space, says Honolulu-based Crystal Stranger, president of 1st Tax Inc. and an enrolled agent who can represent taxpayers before the IRS. If you rented that 100-square-foot room mentioned above, which is 5% of the total space, for a total of six months, you’d take 5% of the maintenance and utilities, divide them by half, and then deduct that amount on Schedule E.

5.  Paying a Relative’s Mortgage

Good on you for helping someone in need by covering their mortgage payment, but be a smart philanthropist. No one will get any tax deductions for those payments if you directly pay the lender, Freyman says, unless you’re listed on the deed.

To increase the chances that someone snags the deduction, make a gift of the money to your parent or other beneficiary and let her be the one to pay the bills — although you won’t get any tax benefit unless you can claim her as a dependent. Treating a relative who doesn’t live with you as a dependent means meeting certain requirements. For instance, you need to have a certain type of relationship with the person and the relative must pass a gross income test.

Also, remember that there’s a limit on the amount of money you can give someone in a year — $14,000 — without incurring a gift tax. If you exceed the annual total, you may have to pay the tax.

6.  Never Challenging Property Tax Bills

For many, local property tax is a big chunk of their paycheck, and sometimes that chunk is bigger than it needs to be. “Values go up and down over time,” says REALTOR® and Atlanta attorney Bruce Ailion. “The assessor reassesses areas of town in bulk from time to time. Often these bulk reassessments result in a valuation 10%, 20%, even 50% more than a home’s value.”

Reassessments happen at different times, depending on location, and local and state laws will govern what you must do. Typically, you have fewer than 30 days to challenge the assessment, and, in a large metropolitan area, the process could take as long as a year.

You’ll want to start by checking the assessment data — size of the lot, number of rooms, bathrooms, etc. — to be sure that the facts are correct. If not, the appeals process may be easy.

You can also check to see if the assessment seems reasonable. Work with your real estate pro to get market data, such as info on comparable properties — known as “comps.” Then look at local tax records to see if the value of your property seems overly high in comparison to like properties. You could even hire an independent appraiser, although that can run $350 to $600, undercutting the savings you might ultimately receive.

You then appeal the property tax bill first to the assessor’s office. If the result is unsatisfactory, you may be able to appeal to a local board or possibly to a court. The odds are good enough that appealing usually makes sense. “I’ve done about 150 appeals and never had an increase,” Ailion says. “The worst case is the value stays the same.”

By: Erik Sherman

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6 Tips for Choosing the Best Offer for Your Home

You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers.

1. Understand the process.

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines.

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process.

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally.

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term.

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures — such as appliances, furniture, or window treatments — to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attach a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative.

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible

 

 

 

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Texas Contemporary Art Fair

TEXAS CONTEMPORARY ART FAIR
September 29, 2016 – October 2, 2016 

George R. Brown Convention Center

1001 Avenida de las Americas
Houston, Texas 77010

Texas Contemporary Art Fair is happening on 29 Sep 2016 at George R. Brown Convention Center Houston, United States Of America. Its a premier event in Gifts & Handicrafts industry.

 

 

Curb Appeal: The First Impression of Your Home

The sale of your home can depend a great deal on whether or not it has Curb Appeal. What is Curb Appeal? Simply put, it is anything visible to a prospective buyer from the street that makes them want to see more of the house. Curb Appeal can be a powerful force in attracting potential buyers to your home. But how do you ensure that your house has as much Curb Appeal as possible?

Here are some easy places to start:

  • Make sure the lawn is mowed, and all trees and bushes are well trimmed.
  • Place planters of flowers or hanging baskets on the porch.
  • See that all flowerbeds are weeded and freshly mulched.
  • Check that the front door is attractive and freshly painted.
  • Consider re-painting the exterior of your house.
  • Give the outside of your home a good scrub: clean the windows, patio furniture, driveway and sidewalks.
  • Finally, make sure your house numbers are visible, your mailbox is in excellent condition, and that all porch and outside lights are working properly. You want interested buyers to find your home easily!

These are just a few ideas to get you started in preparation for selling your home. Once the home is ready to be put up for sale, it can be listed on my website, where it can get the attention of thousands of prospective buyers. I’d love to sit down and talk with you on other strategies for marketing your home. I look forward to hearing from you.

#HoustonHouseHunter #tripleH

Master Planned Community? What does that term mean?

The Woodlands, Texas is known for being one of the first and most popular master-planned communities in the country.   What is a master planned community you ask?  A master planned community is collection of uniquely different sub-divisions all with different home styles and price ranges surrounded by commercial developments and neighborhood amenities.  A master planned community has amenities like gyms, water parks, hiking trails, parks and golf courses.  It can also consists of shopping malls, movies theaters, restaurants, convention centers and entertainment venues.  Pretty much everything you could possibly need or want is always just a stones throw away.   Master Planned Communities also consist of community driven schools that offer quality and variety to it’s residents.  The Woodlands, Texas exemplifies what it means to be a master-planned community. The Woodlands consist of 8 sub-divisions or villages as they are called in The Woodlands.  Grogans Mill, Panther Creek, Cochran’s Crossing, Indian Springs, Alden Bridge, College Park, Sterling Ridge, and the newest member of the family, Creekside Park.   Built in 1974, it is one of the most tenured and desirable master planned communities in the country to live in.  The Woodlands consist of The Woodlands offers every amenity imaginable to its residents.   Concert venues, shopping, restaurants, museums, parks, spas, world class golf, world renown schools the list goes on and on.  The Woodlands is still the blueprint of what a well executed master planned community should look like.  If you think you want to live in a master planned community and are considering The Woodlands for your next home, call DeeDee Wyms Realty and lets schedule a time to go out see The Woodlands. 

Click The Link to Watch the Video About Master Planned Communities

 

Master Planned Community- THE WOODLANDS
Master Planned Community- THE WOODLANDS

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Thinking About Buying A Home? Watch This Video First!

buying a home

Thinking about buying a home.  Finding the right agent is the first step. Finding the right agent when buying a home means knowing what to expect from the right agent.    Understanding how an agent is required to protect your best interest will help the home buying experience happen with clarity.   If you are thinking about buying a home in Spring, Texas CLICK THE LINK BELOW to watch a video about an Agent’s Responsibilities to you.  Then call DeeDee Wyms Realty

Homes For Sale In Spring Texas

There are great homes for sale in Spring Texas.  Spring, Texas offers homeowners great access to new, and newly renovated homes.  Spring, Texas also has great schools, access to restaurants and shopping and easy access to the City of Houston. Click the link below to EASILY SEARCH all homes for sale in Spring, Tx priced between $200,000 to $300,000.

http://search.deedeewymsrealty.com/i/homes-for-sale-in-spring-texas

 

 

 

3 Top Reasons To Buy or Lease A Home In The Woodlands Spring Area

1.  Natural Beauty  The Natural Beauty of the area is one reason to buy or lease a home in The Woodlands Spring Area.  The Landscape of the area is covered with hundreds of thousands of tress.  As the seasons change the community’s vegetation takes on different personalities.  This time of year, (fall) is particularly gorgeous here.  Several neighborhoods have lakes and ponds so it is normal to see homeowners in The Woodlands/Spring fishing, canoeing, and even boating at Lake Conroe which is just to the north of The Woodlands.  There are also parks in every neighborhood that are surrounded by homes with gorgeous architecture and beautiful greenbelts.  The Natural beauty of The Woodlands/Spring makes the decision to buy or lease a home in the The Woodlands Spring area worth every penny. 

2.  Great Schools-   The Woodlands Spring offers has some of the best schools in the country.  Buying a home in The Woodlands/Spring buys you access to variety of public school options that are amongst the best in the State of Texas.  You will have several Blue Ribbon private schools to choose from as well.  The Woodlands/Spring also has several great options for higher education.  Their is Lone Star College and several other trade schools in the area.  Whatever your educational needs, Buying or Leasing a home in The Woodlands/Spring gives you access to great schools for your kids.    

3.  Shopping  If you love shopping, owning or leasing a home in the Woodlands/Spring is a dream come true. There are several places to shop no matter your taste or budget.  Market Street has shopping for every man, woman, and child living in the area. There are clothing boutiques, an outdoorsman store, a movie theater, restaurants, and even a outdoor sitting area for small events and concerts. There is also the Woodlands Mall that offers some of the best shopping and dining to be had in the entire Houston Area.  There are great opportunities to own or lease a home within walking distance or bike riding distance to the Woodlands Mall and Market Street.  Grogan’s mill and Panther Creek are both neighborhoods that are just a stones throw away from Market Street and The Woodlands Mall. Creekside Park and Indian Springs are examples of neighborhoods that are just a few minutes Drive away.

Things to Remember When Buying a Home

The real estate market is currently booming nationwide and for this reason more and more individuals are looking into buying a home. As the purchase of a home is a major decision and the largest purchase you may ever make there are a few things that prospective homebuyers should look for in their journey to finding the perfect home.

Area Where the Home Is Located: One of the most important factors you should consider when purchasing a home is the location. The neighborhood where the home is located plays a huge role in deciding whether of not to make an offer on a home. Several factors such as safety, school quality and nearby amenities are all things that are related to the location aspect. The best practice is to start your search for a potential property by narrowing your search down to a specific area you would really like to live in. This will also help to narrow down one’s options with regard to homes for sale.

Price of the Home: It is important to have a set amount of money that you are capable to spend for your home purchase. It is beneficial to know exactly what price range your potential real estate purchase will fall into. Having a set amount in mind can help you focus on finding the right house you know you can afford. Viewing homes outside of your price range only clouds the home search process. When buying a home, you want to be sure that you will be comfortable with the mortgage payments once the house is purchased. Getting a pre-approved mortgage from your mortgage company can give you your exact budget and it will make the process of finding a home and putting in an offer much, much easier.

Home Layout: Home layout is a very important part of finding a home. Square footage is not the only indicator of how closed or open a space feels. A 2000sqft home can feel and function better than a 2500sqft home if the layout is done the correct way. Layout determines several important things like, the amount of storage space, amount of entertaining space, proximity to babies or children living in the house, how your home makes you feel during day to day living in the house. Your home layout will determine your overall happiness with your new living space. Every home has plusses and minuses when it comes to layout. Getting this right can be challenging but it is a must you get the layout that fits your needs.

How Long the House Has Been On the Market: One of the most important indicators to look for when viewing homes to possibly purchase is how long they have been on the market. This can give you a few clues about the home including the condition of the home, price of the home and the mindset of the owner with regard to the sale. This is a good indicator of the overall situation surrounding the house. Purchasing your new home will be an exciting experience to embark on. You can get overwhelmed with all of the details that go into very important decision. However, if you understand how to go through the process and you now exactly what you are looking for, the journey to buying a home can be a enjoyable and fulfilling experience. Buying home is and experience that gives you a filling of accomplishment weather you are purchasing for an investment, for you or your family.