Wednesday, November 27, 2013

Today is Thanksgiving!

Thanksgiving is a special celebration full of family gatherings, holiday meals, and giving thanks. It is a time of roasted turkeys, cranberry confections, cornbread stuffing, piping hot pumpkin pies, football games, and holiday parades.

The three-day festival that is now hailed as the “first Thanksgiving,” took place in the village of Plymouth in 1621. Governor William Bradford organized a feast to celebrate the Pilgrims’ first successful corn harvest. Those in attendance included the Wampanoag chief Massasoit. Historians know that the Mayflower’s sugar supply had run low, so the meal did not feature any pies, but one record indicates that four men were sent on a “fowling” mission, which very well may have resulted in a turkey!

Presidents Washington, Adams, and Monroe proclaimed national Thanksgivings, but the custom soon fell out of favor. Then, in the 1820s, Sarah Josepha Hale began a campaign to reinstate the national celebration, and in 1863 President Lincoln proclaimed a Thursday in November as the National Day of Thanksgiving. The holiday has been celebrated ever since

Friday, September 13, 2013

How to Investigate a Potential Neighborhood

You’ve gone to the open house. You’ve had a private showing. You’ve read the disclosures. You’ve decided this is the house for you, and you’re ready to make an offer.
Before you take that step, though, you should fully check out the neighborhood. After all, this is where you’re going to live for years. Is there something you don’t know about that could negatively affect the resale value later? Is there a neighbor who comes roaring home late at night on a muffler-free motorcycle? Is the next-door neighbor operating a day care for pre-schoolers?

Given the high stakes of homeownership, it pays to do your homework before making an offer. For example, a potential buyer was ready to sign on the dotted line for a home in San Francisco, a city famous for its microclimates. The buyer had only been to the home during the day, when it was sunny and warm. On his real estate agent’s advice, the buyer returned at night — to find the house blanketed by cold, windy fog. He continued his home search elsewhere, relieved he hadn’t unknowingly bought into the city’s “fog and wind belt.”

Here are five ways to investigate a neighborhood before you buy.

1. Talk to the neighbors
Without being intrusive, look for an opportunity to chat with your potential neighbors. What’s their opinion of the block and the neighborhood? Do they know of any problem neighbors? Are they aware of any recent car or home break-ins? Is anyone planning a big remodel that could impact other homes or their values? Do they know of someone on the block who might be getting ready to sell? An even more desirable home could be coming on the market.

2. Visit day and night, weekday and weekend
As the San Francisco example shows, don’t just visit the house during the day. Check it out at night to get a sense of what’s going on in the neighborhood after hours. Is it noisy or calm? Visit on the weekend and early morning, too. The more times of day you go, the more chances you’ll have to get the feel for the neighborhood.

3. Check out the local newspaper and the neighborhood blog
Some neighborhoods still have their own newspapers. If there’s one published for the neighborhood you’re considering, check it out for local stories. Pay particular attention to the “police blotter,” which typically lists crimes reported in the area. Also, some neighborhoods have blogs where locals ask for tips and advice, or post issues or concerns affecting the neighborhood. A Google search should help you find out whether there’s a blog for the neighborhood you’re considering.

4. Get an app
Some smartphone apps, such as CrimeReports for iPhone, provide information about crime based on your location or address. Among the problems you may see displayed on a map are noise nuisances, sex offenders and vehicle break-ins. The CrimeReports app gives you some specifics, such as when and where each incident occurred.
Zillow’s real estate apps allow you to see estimates of properties on the block. They also allow you to search recent sales or see rentals, a good indication of whether your neighbors are renters or homeowners.

5. Google the street address
If you Google the home’s street address, you might be amazed at what you find. You might, for instance, discover a nearby home-based business with employees (which could reduce street parking spaces). Using Google’s Street View, where photos can be months if not years old, you might discover that the ground-floor bedroom window once had bars on it.

Be a sleuth before the sale
The Internet is an amazing resource of information. Too often, though, potential home buyers don’t fully use it to find out everything they can before entering into a contract on a home. As soon as you’ve identified a home you want to buy, get online and do your homework. You might be pleasantly — or unpleasantly — surprised by what you learn.

Richmond Approves Plan to "Seize" Underwater Mortgages

Early Wednesday morning the Richmond City Council (on a 4 to 3 vote) approved a plan to "seize" underwater mortgages using their power of eminent domain and turn them over to an investor. Opponents are concerned the plan will dissuade banks from making loans in Richmond.

Meanwhile, on Thursday a federal judge rejected a suit filed by two banks to stop Richmond from seizing mortgages. This decision allows Richmond and Mortgage Resolution Partners (MRP) to move forward. MRP is a San Francisco-based investment firm that is shopping the mortgage seizure plan to cities throughout California.

Thursday, May 30, 2013

Short Sales Losing Favor with Lenders?


Lenders may be less inclined to approve short sales due to rising home prices, according to a new report by RealtyTrac.

During the first quarter, short sales posted a 35 percent drop compared to year-ago levels.

"The decrease in short sales was a bit of surprise given that 11 million home owners nationwide still owe more on their homes than they're worth," says Daren Blomquist, spokesman for RealtyTrac. "Rising home prices are taking away the incentive for short sales on the part of both home owners and lenders."

Foreclosure prices are on the rise, increasing 28 percent in the first quarter. The banks may be realizing they won’t necessarily lose a lot more money by letting a home go into foreclosure instead, Blomquist says.

However, foreclosure sales have been plummeting too, reaching their lowest levels since early 2008. Foreclosure sales made up 21 percent of the total market during the first quarter, which is down from 25 percent one year ago, according to RealtyTrac.

Foreclosure sales peaked in early 2009, when they made up 45 percent of all homes sold nationally.

Still, foreclosures are making up the biggest bulk of sales in certain states, such as Georgia (where 35 percent of sales were foreclosures in the first quarter), Illinois (32 percent), and California (30 percent), according to RealtyTrac.

Monday, May 6, 2013

10 Ways to Reduce Housing Costs in Retirement.....

Housing costs make up one-third of the average American household's budget, the largest monthly expense for most families. And since reducing living costs is the most common way to make ends meet in retirement, it makes sense to take a hard look at your housing costs and what you can do to reduce them.

The secret that will make -- or break -- your retirement Your home equity: How to use it for retirement security Retirement planning outside the box: Move out of the suburbs How to retire with no retirement savings: the "Golden Girls" solution Welcome to Week 12 of my series 16 weeks to plan your retirement. Since most Americans have insufficient savings to fund a traditional retirement, they'll need to look for creative ways to make every dollar count, and finding resourceful ways to lower housing costs will help.

Here are 10 ways to pare your housing budget:

-- Pay off your mortgage before you retire or shortly thereafter. If you're several years away from retirement, consider refinancing with a 15-year fixed mortgage. Interest rates are near all-time lows.

-- Downsize to a smaller house, with reduced bills for utilities, maintenance and property taxes. You might also be able to realize some home equity that can be invested to generate retirement income.

-- Move to a location that enables you to reduce other costs, such as transportation or health care. This could mean moving out of the suburbs and into a city.

-- Move to a less expensive part of the country. There are a number of "best places to retire" websites that you can review to give you some ideas.

-- Move to another country with dramatically reduced living costs. Panama, Costa Rica and some South American and European countries consistently show up on review lists of the best places to live abroad.

-- Rent out a room or two for additional income. This solution works best if you don't want to move and have a large house. After my daughter graduated from college, she rented a room from a retired couple for a year. It was a win-win situation: My daughter had inexpensive housing, and the couple earned some extra spending money.

-- Share housing with other retirees -- what I like to call the "Golden Girls solution." Not only will you share in the cost of housing, but you can also realize savings in regards to your insurance, utilities and even food. Obviously this option isn't for everyone, but don't dismiss it without thinking it through.

-- Consider a reverse mortgage to help you generate retirement income. This solution works for people who own their house and plan to stay for many years. If you didn't or don't plan to buy long-term care insurance, however, I advise keeping your home equity in reserve for a day when you could face high bills for long-term care.

-- Move in with one of your children. Of course, this solution is fraught with emotional issues. Of critical importance for you: How can you make your presence a help to your child's family instead of a burden?

-- Sell your home, and rent something that better fits your needs, such a place with less square footage or one that's part of a senior community. You can use a "buy versus rent" calculator to analyze this possibility; these calculators compare all housing costs when either buying or renting, including the best use of the assets you'd apply for a down payment on a house, and your expectations for rent increases and home appreciation. To analyze this solution as a retiree who currently owns a home, estimate the amount of money you'd realize from selling your house, after subtracting selling costs, and use that as the theoretical down payment on a smaller, downsized house. Then compare that option to the cost of renting a home or apartment.

I realize that some of these ideas may not work or be desirable for everybody. For example, not many people will want to live abroad, and many will want to live close to their children (but maybe not too close!). Or you might find it undesirable to share housing. But if you reach retirement age with inadequate savings for a traditional retirement, you don't have many choices: You'll either need to keep working, reduce your living expenses or work out some combination of the two.

I'm always impressed with the creativity of our readers, so if you have helpful solutions to share, please add them in the comment section below.

As with the other steps in this series, it will most likely take more than one week to investigate your housing options. But get started today, and you'll make great progress. You'll feel more confident in your ability to retire as you investigate various ways to make ends meet. And keep in mind that ultimately, the best place to retire is one where you'll be happy and comfortable.

© 2013 CBS Interactive Inc.. All Rights Reserved.

Sunday, April 21, 2013

Unique idea for a Single Serving of a Chocolate Chip Cookie

For those days you just want to make one cookie.....

1 tbsp. butter, melted 1 tbsp. white sugar ... 1 tbsp. brown sugar 3 drops of vanilla pinch of salt 1 egg yolk 1/4 c. flour 2 tbsp. chocolate chips

MICROWAVE 40-60 SEC IN A CUP OR BOWL. {single serving} deep dish chocolate chip cookieSee More

Green Kitchen Countertops: 3 Eco-Friendly Choices

Save money over granite and be kind to your home planet. How? Pick a green kitchen countertop material when you remodel your kitchen.

Perhaps the most luring kitchen improvement ( is replacing countertops. If you're replacing your kitchen countertops, it's smart to go green whether you're on a tight budget or can afford something luxe. These days, sustainable materials are just as good-looking as traditional countertops like granite or quartz, so making a green choice won't ding your home's resale value. What's green? Green kitchen countertops feature recycled or sustainable content, low-toxicity binders, eco-friendly manufacturing processes, or a combination. Local production is good, too, if you can arrange it, because transporting countertops is a big fuel-guzzler.

But the most important thing is to pick something durable-if you never have to buy new countertops again, that's as green as it gets.

These three green kitchen countertop options earn high marks for durability and style. And for value, compare them to the ubiquitous slab granite, which costs $60 to $100 per sq.ft. 1. Recycled paper countertops

Cost Starts at $30/sq ft And, easy install = labor savings Lifespan TBD because new on the scene, but likely a long time. It may seem counterintuitive to use paper for a countertop, but when you bind paper fibers with resin, it makes a surface that's tough as nails. What's more, they tend to be easy to install. Since installation can equal 80% of your total cost, expect to save on labor. •PaperStone ( is a brand that meets Forest Stewardship Council certification requirements for materials made with sustainable forest management practices and is VOC-free.

•Squak Mountain Stone ( is made from recycled paper, recycled glass, reclaimed fly ash, and cement; the finished countertop slabs resemble limestone and soapstone.

•EcoTop ( countertops consist of renewable bamboo fiber, post-consumer recycled paper, and water-based resin glue.

2. Reclaimed wood countertops

Cost Starts at $40/sq ft Lifespan Lifetime Reuse trumps recycling when it comes to conserving resources because it keeps products from entering the waste stream. So salvaged wood countertops are green by definition. Purchase them directly at a local salvage supply or through a manufacturer that uses reclaimed materials.

Starting at $40 per sq.ft., manufactured countertops made from reclaimed wood are typically more expensive than regular butcher block.

Wood's a beauty. But it's prone to water damage, needs occasional re-sealing (or frequent applications of mineral oil, which can be a hassle), and shouldn't be installed directly next to a sink or dishwasher. So you'll need to budget for a second material to use in your kitchen. •Craft-Art ( includes a line of wood countertops made of reclaimed wood from older barns, warehouses, and commercial buildings.

•Endurawood ( fashions wood countertops from reclaimed fir and oak, including old wine vats.

3. Recycled glass countertops Recycled glass is gorgeous and tough (you can actually set hot pots directly on it)-but you'll pay a price comparable to slab granite, starting at around $50 per sq.ft. and going much higher. •Vetrazzo ( makes countertops that are 85% recycled glass. Almost all the glass comes from curbside recycling programs.

•IceStone (, which is 100% recycled glass in a cement substrate, meets Cradle to Cradle ( gold certification standards, meaning the products contain no problematic chemicals, the materials can be reutilized, and 50% of manufacturing was done with reusable energy.

Article From

By: John Riha Published: November 06, 2010 Karin Beuerlien contributed to this article.

Wednesday, March 6, 2013

10 Foolproof Vegetables for Container Gardening

Want fresh veggies but don’t have a back 40, the time, or the know-how for a full-size vegetable plot? Container vegetable gardening is the answer.

Top reasons to grow veggies in containers

Minimal space needed hardly any weeds no back strain watering is easy growing your own food saves money Mary Moss-Sprague, master gardener and author of Stand Up and Garden (Countryman Press, 2012), grows all her vegetables in containers after a disease ran rampant through her garden soil and decimated her tomato plants -- a non-problem with containers because they don’t share soil.

“I’m never going back to growing things in the ground,” she says.

Tips for container gardening

Containers: Any container will do, as long as it’s deep enough for the plant (check the seed packet). Just drill ½-inch drainage holes in the bottom.

Moss-Sprague suggests snagging 5-gallon food buckets from your grocery store or deli, or asking your neighborhood garden center for 5- to 7-gallon grower’s pots — both are free. Before using, wash out the container with a gallon of water mixed with a cup of chlorine bleach to kill off any lingering bacteria.

Soil: All-purpose soil is pretty goof-proof. But don’t use topsoil -- it won’t work because it doesn’t have the required nutrients.

Plants: Read instructions on the seedling or seed packet first. The same rules for sun, watering, space, and hardiness zones apply to container vegetables.

Top 10 container vegetables

1. Tomatoes: All kinds do well in pots. Try grape and cherry varieties for easy growing -- their small size makes them easy to handle. Put up a trellis because they love to climb.

Pros: Growing them in containers makes them a snap to water because it’s easier to get under their leaves; cherry tomatoes produce quickly. Cons: Don’t seed directly in container -- young tomato plants need specific growing conditions to get started, which can be tricky; buy seedlings instead. 2. Peppers: Bell and chili peppers are good container contenders. Peppers can be picky when starting out, so plant seedlings instead of seeds.

Pros: Red mini bell peppers are quick producers -- about 2 months until they’re ready to eat. Cons: You’ll need some patience -- regular peppers take up to 3 months to mature. 3. Lettuce: Any kind of lettuce will grow in pots. You can seed directly in the pot.

Pros: Huge selection to choose from, and you can plant different varieties in the same container — a beautiful look. Cons: They need full sun — you might have to move your containers around to ensure good exposure. 4. Spinach: All different varieties really thrive in containers. Scatter the seeds and thin them out as they grow.

Pros: You can trim off the leaves when you want them and they’ll just keep growing more. Cons: Good drainage is really important for spinach; it prefers sunny days and cool nights. 5. Radishes: French Breakfast, White Icicle, and Short Cherry Bell are three varieties to try. Plant 1 to 2 inches between, and thin as they grow.

Pros: Super quick! About 25 days and they’re ready to crunch. Cons: They don’t like heat -- if you live in a hot zone, look for varieties that are heat-resistant, or grow in the spring and fall. 6. Green onions: Very pretty and very easy to grow.

Pros: They don’t take much room and are easy to manage -- they like sun, but be sure to wait until the danger of frost has passed before planting. Cons: They take a couple of months until they’re ready. 7. Carrots: Any type of carrot will work in containers -- when they’re ready to harvest, soak the container with water first to making pulling easier.

Pros: There are many types to choose from; “kaleidoscope” mixes come with a variety of flavors and beautiful colors. Cons: Some will take up to 80 days until they’re ready; if you’re an impatient gardener, look for quick-maturing types, such as Touchon and Little Finger. 8. Swiss chard: Seed directly in your container and trim leaves as needed — they’ll continue to produce. Chard is tastiest when it’s young.

Pros: Very durable plant that tolerates warmth. Cons: Getting your kids to eat it (unusual flavors). 9. Cucumbers: Another good plant for impatient gardeners, cukes add crunch to summer salads and sandwiches.

Pros: Quick to germinate and quick to grow. Cons: They need sturdy support posts or a trellis so the plants have somewhere to climb. Or try smaller, less-heavy bush cucumbers. 10. Green beans: So easy to grow, you can put your kids in charge.

Pros: Quick growers and you’ll have a bumper crop if you pick regularly — they’ll just keep growing more. Cons: Climbing beans — called pole beans — grow 5 to 6 feet, so stick to bush beans, which hit 1-2 feet on sturdy, self-supporting stems.

By: Danielle Beurteaux

Saturday, February 23, 2013

Don't-Miss Home Tax Breaks

From the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns.

Mortgage interest deduction Private mortgage insurance deduction Prepaid interest deduction Energy tax credits Vacation or second home tax deductions Home buyer tax credit repayment Property tax deduction

Mortgage interest deduction One of the neatest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet.

Interest you pay on a mortgage of up to $1 million — or $500,000 if you’re married filing separately — is deductible when you use the loan to buy, build, or improve your home.

If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.

If you use loans secured by your home for other things — like sending your kid to college — you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.

PMI and FHA mortgage insurance premiums

Helpfully, the government extended the mortgage insurance premium deduction through 2013. You can deduct the cost of private mortgage insurance as mortgage interest on Schedule A — meaning you must itemize your return. The change only applies to loans taken out in 2007 or later.

What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).

If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you lose 100% of this deduction (10% x 10 = 100%).

Besides private mortgage insurance, there's government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.

Prepaid interest deduction Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid them along with other mortgage interest.

If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.

But if you refinance to get a better rate and term or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the term of the loan. Say you refi for a 10-year term and pay $3,000 in points. You can deduct $300 per year for 10 years.

So what happens if you refi again down the road?

Example: Three years after your first refi, you refinance again. Using the $3,000 in points scenario above, you’ll have deducted $900 ($300 x 3 years) so far. That leaves $2,400, which you can deduct in full the year you complete your second refi. If you paid points for the new loan, the process starts again; you can deduct the points over the term of the loan.

Home mortgage interest and points are reported on IRS Form 1098. You enter the combined amount on line 10 of Schedule A. If your 1098 form doesn’t indicate the points you paid, you should be able to confirm the amount by consulting your HUD-1 settement sheet. Then you record that amount on line 12 of Schedule A.

Energy tax credits The energy tax credit of up to a lifetime $500 had expired in 2011. But the Feds extended it for 2012 and 2013. If you upgraded one of the following systems this year, it’s an opportunity for a dollar-for-dollar reduction in your tax liability: If you get the $500 credit, you pay $500 less in taxes.

Biomass stoves Heating, ventilation, air conditioning Insulation Roofs (metal and asphalt) Water heaters (non-solar) Windows, doors, and skylights Storm windows and doors Varying maximums

Some of the eligible products and systems are capped even lower than $500. New windows are capped at $200 —and not per window, but overall. Read about the fine print in order to claim your energy tax credit.

Determine if the system is eligible. Go to Energy Star’s website for detailed descriptions of what’s covered. And talk to your vendor. The product or system must have been installed, not just contracted for, in the tax year you'll be claiming it. Save system receipts and manufacturer certifications. You’ll need them if the IRS asks for proof. File IRS Form 5695 with the rest of your tax forms. Vacation home tax deductions The rules on tax deductions for vacation homes are complicated. Do yourself a favor and keep good records about how and when you use your vacation home.

If you’re the only one using your vacation home (you don’t rent it out for more than 14 days a year), you can deduct mortgage interest and real estate taxes on Schedule A. Rent your vacation home out for more than 14 days and use it yourself fewer than 15 days (or 10% of total rental days, whichever is greater), and it’s treated like a rental property. Those expenses get deducted using Schedule E. Rent your home for part of the year and use it yourself for more than 14 days and you have to keep track of income, expenses, and divide them proportionate to how often you used and how often you rented the house. Home buyer tax credit There were federal first-time home buyer tax credits in 2008, 2009, and 2010.

If you claimed the home buyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest. If you used the tax credit in 2009 or 2010 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. Example: If you bought a home in 2010 and sold in 2012, you pay it back with your 2012 taxes. That repayment rules are less rigorous for uniformed service members, Foreign Service workers, and intelligence community workers who get sent on extended duty at least 50 miles from their principal residence. Members of the armed forces who served overseas got an extra year to use the first-time home buyer tax credit. If you were abroad for at least 90 days between Jan. 1, 2009, and April 30, 2010, and you bought your home by April 30, 2011, and closed the deal by June 30, 2011, you can claim your first-time home buyer tax credit.

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

Property tax deduction You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.

If you bought a house in 2012, check your HUD-1 Settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.

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; tax laws may vary by jurisdiction.

By: Dona DeZube ~ Published: January 10, 2013 By: Dona DeZube Published: January 10, 2013

Thursday, February 14, 2013

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.

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.

Tuesday, January 15, 2013

How to Get Rid of Stuff and Declutter Your Life

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