Under Contract: #650 Starlet Drive in 63031.

Even though it is only February, the swift Spring market pace is in full swing, St. Louis! If a property comes on the market properly priced and prepared, it sells within hours. My 1st time home buyer clients were quick on the draw of this adorable move-in ready ranch...

... and their urgency paid off.  Starlet hit the MLS at lunch time, we toured it by dinner time, we wrote a contract by bedtime, and over a half dozen Buyer appointments had to be cancelled by the morning as we beat them to the party! Time is of the essence friends. Hire a proactive Realtor!

#650 Starlet Drive closes escrow in April. A warm thank you and congratulations, J and A, on your big purchase!  As I have said before, I am a HUGE advocate of young people trading in rent for a mortgage.  Rent or buy?  The numbers don't lie! Buying is the best and only way to begin to build a financial nest egg.  Period.

In St. Louis and considering a move in 2019? The time to start planning is now! Have a friend who is looking for an agent?  I proudly base my business on direct referrals and wear my past client reviews like a badge of honor.  Let’s connect...

Rent or Buy? The numbers don't lie!

Rent or buy?

Numbers don't lie, friends.

We bought our 1st house at 22 and 26 at the urging of my (real estate investor) father and it was probably the best financial decision that we ever made! 🏡💰 We made 47k profit (more than we COLLECTIVELY made per year at the time) in addition to a little payment equity in only 6.5 years. We benefited from tax breaks and instant equity thanks to a strategic and smart buy, which ultimately set us up for a more financially healthy future.

THE FACTS: You are either building your landlord’s nest egg and financial future or your own. Stop making your landlord rich by putting equity in their pocket and pay yourself!  You don't have to wait until you can afford your forever home or the PERFECT house on the PERFECT street.  Be smart and start building wealth now!  Work your way up to that home, step by step.  It works!

In St. Louis?  I would love to help!  Let's connect:

St. Louis County Tax Tip- review your 2015 reassessment!

Heads up, St. Louis‬ County Homeowners!

Tax talk is no fun, though tis the season!  If you have not yet been notified... 2015 property reassessments have been recently released by the St. Louis County Department of Revenue. The County Assessor is required by Missouri state law to reestablish the fair market value of all real property as of January 1 of every odd year. The reassessed value is then applied to the tax rates.   How does this personally affect you?  It is highly likely that your property taxes will either go up or down depending on your fluctuation.

To review your latest valuation, visit http://revenue.stlouisco.com/ias/  and search for your property by owner name or address search.  Do you feel like your new valuation is unfair or unjustified?  You may APPEAL!  To appeal your valuation online, visit  http://revenue.stlouisco.com/AssessmentAppeal/OnlineAppeal/OnlineAsmtAppeal.aspx for more information.

Own a Home? Check Out These 8 Tax Breaks

Ahh, tis the season!  We can all use a little help, no?  Hence when I stumble upon a useful article, particularly during this time of year, I try to share it.  One of the most substantial benefits of owning your own home is evident at tax time in the form of deduction! 

This article that I stumbled upon on YAHOO! Homes is a fantastic guideline to ensure that you are maximizing your deductions...

Own a Home? Check Out These 8 Tax Breaks

By Mary Boone | Zillow – Wed, Feb 20, 2013 1:02 PM EST

Taxes are due April 15, which means it’s time to start gathering your W2s, 1099s, child care receipts and bank statements.

 

But before you sit down with your accountant, it’s important for you to know that merely owning a home could mean you qualify for tax breaks. In most cases, you need to itemize your taxes in order to take advantage of these deductions. Yes, it makes the tax-filing process seem impenetrable, but the benefits may outweigh the complications.

Here are a few of the tax breaks you’ll want to investigate:

Mortgage interest paid at settlement

Take a look at your closing statement; one item that’s generally listed there is home mortgage interest. On a mortgage of up to $1 million, you can deduct the interest that you pay at settlement if you itemize your deductions on Schedule A (Form 1040). This amount should be included in the mortgage interest statement provided by your lender.

Points

Did you pay points in order to obtain your home mortgage? These fees are included on the income tax deductions list and can be deducted as long as they are associated with the purchase of a home. If you refinanced your home, these points are still deductible, but it must be done over the life of the mortgage.

Property taxes

As long as they are based on the assessed value of the real property, you can deduct your state and local property taxes. However, if your money is being held in escrow for the purpose of paying property taxes, you cannot claim this deduction until the money is actually taken out of escrow and paid. If you do this, check your Form 1098 for the amount you may deduct. Be aware that if you receive a partial refund of your property tax, the amount of the deduction you can claim will be reduced.

Selling costs

If you sold a home in the past year, you may be able to reduce your income tax by the amount of your selling costs. These costs can include things such as repairs, title insurance, advertising expenses and broker’s fees. The IRS only allows the deduction of repair costs associated with selling if the repairs were made within 90 days of the sale. It’s also crucial that the repairs were made with the intent of improving your home’s marketability. Selling costs are deducted from your gain on the sale.

Home office

If you use a portion of your home exclusively for the purpose of an office for your small business, you may be able to claim a deduction on your taxes for costs related to insurance, repairs and depreciation. You may only claim this deduction if the space within your home is used exclusively and regularly as either your principal place of business or a place where you meet and deal with customers or patients. You may also be able to take advantage of this deduction if a portion of your home routinely is used for storing items (product samples, inventory, etc.) used in your business.
In tax year 2010 (the most recent year for which figures are available) nearly 3.4 million taxpayers claimed the home office deduction.

Mortgage insurance premiums

You may be able to deduct the premiums paid for private mortgage insurance for your principal residence and for a non-rental second home.

The deduction begins to phase out once your adjusted gross income reaches $100,000 ($50,000 for married filing separately). In general, you can deduct the premiums paid for the current tax year only.
A qualified tax adviser can provide information about rules for mortgage insurance provided by the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service.

Home improvement loan interest

If you’ve taken out a loan to make improvements on your home, you may be able to deduct the interest on this loan. Qualifying loans are those taken out to add “capital improvements” to your home, meaning the improvement must increase your home’s value, adapt it to new uses or extend its life. New carpeting or painting are not considered capital improvements, while adding a garage, installing a water heater or building a deck are all examples of capital improvements.

Construction loan interest

If you take out a construction loan to build a home, you may qualify to deduct the interest. The IRS only allows a deduction for mortgage interest if the loan relates to a “qualified” home, which means it must either be your principal residence or a vacation home that you will use for personal purposes.
You can only use this deduction for the first 24 months of the loan, even if the actual construction takes longer.


Tax codes can be confusing. You may want to consult the IRS website for information concerning deductions and credits. Additionally, consider meeting with a professional to ensure you’re not missing any deductions for which you’re eligible.

Tax Reminder for 2012 Buyers!

2 MAJOR Tax Changes for 2012, Homeowners...

Primary Mortgage Insurance premiums for those with less than 20% equity in their property (PMI) and energy efficiency upgrades will no longer be considered tax deductible.

More information can be found HERE on the National Association of Realtors HouseLogic website.

2012 Homeowner Tax Deductions

Yep, it is that time again... tax time!  We can all agree- necessary evil.  That being said, the news is not all bad. 

Homeowners, particularly you first-timers-  the deductions now available to you as a homeowner will likely reduce your tax bill substantially. Particularly if you have been claiming the standard deduction up until now...  the extra write-offs as a result of owning a home will almost certainly make you an itemizer. Suddenly, the state taxes you pay and your charitable gifts will earn tax-saving deductions as well, which equals money back in your pocket.  *cha-ching*

Below are the most common real estate tax deductions. For more information about these tax incentives and to determine which ones you may qualify for, please consult  your tax advisor

Mortgage interest:

For most people, the biggest tax break from owning a home comes from deducting mortgage interest. Your lender will send you Form 1098 in January listing the mortgage interest you paid during the previous year. That is the amount you deduct on the Schedule A tax form. Be sure the 1098 includes any interest you paid from the date you closed on the home to the end of that month. This amount is listed on your settlement sheet for the home purchase. You can deduct it even if the lender does not include it on the Form 1098.

Mortgage Points:

When you buy a house, you may have had to pay "points" to the lender to obtain your mortgage or buy down your rate. This charge is usually expressed as a percentage of the loan amount. And, believe it or not, you may get to deduct the points even if the seller paid them for you as part of the deal. The deductible amount should also be shown on your 1098 form.

Real-estate property taxes:
You can also deduct the local property taxes you pay each year. In the year you purchase your residence, you likely reimbursed the seller for real estate taxes he or she had prepaid for time you actually owned the home. If so, that amount will be shown on your Hud-1 settlement sheet. Include this amount in your real-estate tax deduction. You can't deduct payments into your escrow account as real-estate taxes, as these deposits are simply money put aside to cover future tax payments. You can deduct only the actual real-estate tax payments made from the account by your lender.

Private mortgage insurance premiums:
For mortgage loans with a down payment of less than 20% of a home's cost usually include a premium for private mortgage insurance (PMI), an extra fee that protects the lender if the borrower fails to repay the loan. PMI premiums can be deducted by home buyers. This write-off phases out as income increases above $50,000 on married filing separate returns and above $100,000 on all other returns.

Home improvements:
Save receipts and records for all improvements you make to your home, such as landscaping, storm windows, fences, a new energy-efficient furnace and any additions. When you sell your home, the cost of the improvements is added to the purchase price of your home to determine the cost basis in your home for tax purposes.

Energy credits:
Some energy-saving home improvements to your principal residence can earn you an additional tax break in the form of an energy tax credit. To learn more visit: www.energytaxincentives.org

Tax-free profit on sale:
Another major benefit of owning a home is that the tax law allows you to shelter a large amount of profit from being taxed if certain conditions are met. If you are single and lived in the house for at least two of the five years before the sale, then up to $250,000 of profit is tax free. If you're married and file a joint return, up to $500,000 of the profit is tax free if you lived in the house as a primary home for two of the five years before the sale.

April 15th is quickly approaching: Possible deduction tax traps

Does this sight look familiar? Unfortunately, it does to me.

Yes, it is that time of year again, and most of us can use all of the help that we can get?! I found this article on HouseLogic this AM and felt immediately compelled to share! It focuses on possible property tax deduction TRAPS on the Schedule A. EYE OPENING!

I highly recommend that you consider reading this article prior to filing your taxes...

Schedule A Form:

6 Home Deduction Traps

By: Barbara Eisner Bayer
Published: January 27, 2011

Get an “A” on your Schedule A Form: Dodge these tax deduction pitfalls to save time, money, and an IRS investigation.

Trap #1: Line 6 - real estate taxes

Your monthly mortgage payment often includes money for a tax escrow, from which the lender pays your local real estate taxes.

The money you send the bank may be more than what the bank pays for your taxes, says Julian Block, a tax attorney and author of Julian Block’s Home Seller’s Guide to Tax Savings. That will lead you to putting the wrong number on Schedule A.

Example:
Your monthly payment to the lender: $2,000 for mortgage + $500 escrow for taxes
Your annual property tax bill: $5,500

Now do the math:
Your bank received $6,000 for real estate taxes, but only paid $5,500. It may keep the extra $500 to apply to the next tax bill or refund it to you at some point, but meanwhile, you’re making a mistake if you enter $6,000 on Schedule A.

Instead, take the number from Form 1098—which your bank sends you each year—that shows the actual taxes paid.


Trap #2: Line 6 - tax calculations for recent buyers and sellers

If you bought or sold a home in the middle of 2010, figuring out what to put on line 6 of your Schedule A Form is tricky.

Don’t simply enter the number from your property tax bill on line 6 as you would if you owned the house the whole year. If you bought or sold a house in midyear, you should instead use the property tax amount listed on your HUD-1 closing statement, says Phil Marti, a retired IRS official.

Here’s why:

Generally, depending on the local tax cycle, either the seller gives the buyer money to pay the taxes when they come due or, if the seller has already paid taxes, the buyer reimburses the seller at closing. Those taxes are deductible that year, but won’t be reflected on your property tax bill.


Trap #3: Line 10 - properly deducting points

You can deduct points paid on a refinance, but not all at once, says David Sands, a CPA with Buchbinder Tunick & Co LLP. Rather, you deduct them over the life of your loan. So if you paid $1,000 in points for a 10-year refinance, you’re entitled to deduct only $100 per year on your Schedule A Form.


Trap #4: Line 10 - HELOC limits

If you took out a home equity line of credit (HELOC), you can generally deduct the interest on it only up to $100,000 of debt each year, says Matthew Lender, a CPA with EisnerLubin LLP.

For example: if you have a HELOC for $200,000, the bank will send you Form 1098 for interest paid on $200,000. But you can deduct only the interest paid on $100,000. If you just pull the number off Form 1098, you’ll deduct more than you’re entitled to.


Trap #5: line 13 - Private mortgage insurance

You can deduct PMI on your Schedule A Form, as long as you started paying the insurance after Dec. 31, 2006. (Also, this is also a good time to review your PMI: You might be able to cancel your PMI altogether because you’ve had a change in loan-to-value status.)


Trap #6: line 20 - casualty and theft losses

You can deduct part or all of losses caused by theft, vandalism, fire, or similar causes, as well as corrosive drywall, but the process isn’t always obvious or simple:

- Only deduct losses that are greater than 10% of your adjusted gross income (line 38 of Form 1040).

- Fill out Form 4684, which involves complex calculations for the cost basis and fair market value. This form gives you the number you need for line 20.

Bottom line on line 20: If you’ve got extensive losses, it’s best to consult a tax pro. “I wouldn’t do it myself, and I’ve been dealing with taxes for 40 years,” says former IRS official Marti.

Barbara Eisner Bayer has written about personal finance for the past 17 years. She works hard to translate IRSese into plain English. She has unbounded respect for CPAs.

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