Susan Rauth » Money

9 Tax Questions Homeowners Must Ask

Omahaadmin13 — Tue, 29 Jan 2013 01:15:12 +0000

Now is the time to start putting together records and information for your 2012 tax returns which are due April 15, 2013. Here are some tax questions homeowners need to ask:

1. What tax benefits did homeowners get in the recent ‘fiscal cliff’ budget agreement? Two tax provisions that ended in 2011 were reinstated for 2012 and 2013: 1. Mortgage insurance premiums are again tax deductible for people with adjusted gross income below $110,000; 2. Homeowners will continue to get tax credits for certain energy-efficient home improvements. For details, visit www.irs.gov or ask a tax professional.

2. What are the home related tax deductions people most often claim? One of them is the mortgage interest deduction (which can mean about $3,000 in tax savings for the average itemizing homeowner) and another one is the deduction for property taxes.

3. What is the #1 mistake homeowners make with their taxes? If your real estate taxes are not part of your monthly mortgage payment, you are billed by your town or county. Those tax bills often include other items like trash collection and snow removal fees. Be careful to deduct only the part of your bill that is property tax.

4. What tax deduction should I be sure to take? Make sure to deduct any points you paid on the mortgage you took out to purchase your home in the tax year you paid them. But if you refinanced, you need to amortize and deduct any points you paid over the life of the mortgage. People can easily forget the deduction after a few years.

5. What’s the most important thing I should do as a first-time homeowner? Look at the HUD-1 form you received when you closed on your home. There may be fees like prepaid taxes or interest you can now deduct.

6. What should I look out for if I’ve owned my home for a number of years? If you’ve refinanced and taken out home equity loans or lines of credit, remember that the maximum outstanding home equity debt that’s deductible is $100,000 and the maximum amount of deductible mortgage interest is $1 million.

7. Which home improvement records should I keep? Keep all receipts for the capital improvements you’ve made to the property. Tax rules let you add these expenses to your home’s cost to reduce any profit you might have to pay taxes on when you sell. But most people are exempt from taxes on the first $500,000 of profit for joint filers ($250,000 for single filers).

8. What’s the difference between a capital improvement and a repair? Fixing a furnace so it keeps working is a repair; replacing it is a capital improvement.

9. Will taking a home office tax deduction increase my chances of being audited? Taking the deduction shouldn’t generate an audit by itself. But if your expenses are unusually large, or if it looks like you’re using office costs to create artificial losses, the IRS will probably look into it.

NOTE: Always consult a tax professional for the definitive answer to any tax question.

AN OUNCE OF PREVENTION

Doing routine home maintenance is the best way to avoid those really expensive repairs that can come when things aren’t looked after. Plus, when it comes time to sell, buyers will pay more for a well-maintained home. Here’s how to stay on top of the upkeep.

1. Make a schedule and stick to it. Most maintenance can be done annually: roof, gutter, and downspout repairs; sealing exterior cracks; weatherproofing windows and doors; furnace and air conditioning checkups; inspecting and cleaning the drainage system. Put these on your calendar, then do them!

2. Take care of problems as soon as they appear. If a pipe leaks, repair it immediately. If a roof looks worn, repair it before it leaks. When gutters back up, even on a new house, water can come down inside walls and even damage the framing. You want to avoid the extra damage that can occur after something fails.

3. Assemble a team of contractors and repair people. Ask friends in your area, neighbors, and your real estate agent to recommend trades people. When buying a home, ask the seller for a list of the people who have worked on the property.

4. Be careful when choosing the least expensive contractor or building materials. Don’t make cost the most important factor. Shoddy work and inferior materials will cost you more when you have to redo the job.

5. Ask your home inspector to re-inspect your property. Periodically bring in a professional inspector to show you what needs to be done to keep your home in good shape. Inspectors can point out simple, inexpensive things, like sealing cracks and touching up paint, which can make a big difference in the long run.

It’s also a good idea to keep up with the latest home financing information. If you’re thinking of buying a new home, refinancing your existing one, or funding home improvements, please call or email us – we’re always here to help…. Have a great day!

Optimistic signs for real estate

Omahaadmin13 — Sat, 11 Jun 2011 17:58:25 +0000

By Cindy Gonzalez
WORLD-HERALD STAFF WRITER

Original Article –>

Julie and Kevin Grady spent a lot of years in the big house that hugs Champions golf course.

They built it in 1997, raised two kids and honed careers there, and only recently decided to downsize, knowing also that they spend winters in Arizona.

Once the couple mentally made that lifestyle switch, the rest of the story went much quicker.

Less than 24 hours after going on the market, the Gradys’ four-bedroom home sold to a Des Moines family that once lived in the neighborhood and wanted to return to Omaha.

Although the housing market remains far short of its pre-recession heyday, the Grady case and other recent home sales have made local real estate agents optimistic that the recovery continues.

“We’re cautiously optimistic,” said Joe Valenti, president of CBSHome Real Estate. “It’s a lot better than it could be if Omaha was following national trends.”

New statistics from the Omaha Area Board of Realtors show that 943 homes went under contract last month — not quite the 1,000-to-1,200 range that Mike Riedmann, president of residential sales for NP Dodge, would like to see. But the level was fairly consistent with the previous two months.

The May tally does represent a huge 60 percent jump from May 2010, but last May’s number was artificially low because it was the first month after the expiration of the federal stimulus effort that sparked a homebuyer rush.

In May 2009, the number of signed contracts was reported to be 1,129; in 2008, 993.

Vince Leisey, president of both the Omaha Realtors board and Prudential Ambassador Real Estate, views the latest sales report as “good,” especially considering the showing in the second half of last year.

Historically, he said, March through June are peak home sales months. Leisey expects June to suffer “a pinch” with the all-out focus on the first College World Series at the new downtown stadium. But he sees this year’s trend as steady.

“We’re not going to have that roller coaster this year like we had last year,” said Leisey.

Riedmann suspects that eye-popping gas prices magnified insecurity of would-be homebuyers and dampened activity in early May. As gas prices fell back, he said, interest has picked up. He saw a bright spot in last weekend’s traffic at the NP Dodge 285-home super open house.

“Good activity in open houses usually means there is going to be good activity in the market,” he said. “That bodes well for us.”

Still, overall, it is not what might be expected given that home prices and interest rates are down. Riedmann said one cannot underestimate the shakiness of consumer confidence as the nation tries to rebound from a recession.

Part of the optimism shared by those in real estate is the relative steadiness of the local economy and the area’s low unemployment rate compared with the rest of the nation. “We don’t see the boom and we don’t see the bust,” said Valenti. “We always fall somewhere in between.”

A new report from CoreLogic, which analyzes real estate trends, shows both Nebraska and Iowa in better shape than the nation in terms of borrowers who are “underwater” — meaning that they owe more on their mortgages than their homes are worth.

Nebraska and Iowa, for the first quarter of this year, each had about 9 percent of their homes underwater. The national average, by comparison, had nearly 23 percent.

Such drowning, or negative equity, can occur because of a decline in value, an increase in mortgage debt or a combination of the two. Whatever the reason, said Mark Fleming, chief economist at CoreLogic, “negative equity for the foreseeable future will weigh on the housing market recovery by holding back sale and refinance activity.”

Teresa Elliott, the Prudential representative who sold the Grady house, said her business has stayed above any national fray in part by pricing competitively and beefing up marketing strategies.

To the Gradys, Elliott’s team suggested certain changes — including replacing flowery wallpaper and window coverings with a more neutral theme — to increase appeal.

When Laura Doll went to the open house, she was sold.

Doll had been scoping out the familiar subdivision for two months and actually had been inside the property before its official placement on the market. Her family missed Omaha, she said, and her daughters had been accepted in a nearby Catholic school that they had attended before. They’re all eager to pick up where they left off.

Meanwhile, the Gradys, whose two kids attend out-of-state universities, plan to be settled in their new Midtown Crossing condo in time to watch Jazz on the Green concerts from their balcony that looks toward downtown.

Once they made that mental leap from suburban to urban, Kevin said, it was full speed ahead.

“It’s time for that change to happen.”

Contact the writer:

402-444-1224, cindy.gonzalez@owh.com