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Four Ways Your Home Can Reduce Your Tax Obligation

by Maureen Cool

Owning a home comes with a variety of benefits, and the ability to reduce your overall tax debt is among them.  State and federal governments offer many tax incentives to homeowners, and your accountant will certainly be able to help you determine which ones you qualify for, but here are four of the most common home-ownership-related deductions you can use to reduce your tax debt.

Interest Payments

Deducting the interest you pay on your home mortgage is one of the oldest and most-commonly used methods to save money on your taxes. This method is especially effective during the early years – as most loan payment schedules are structured to be more interest heavy in the early years. You can deduct the interest payments on both your primary residence and secondary residence if your total loan amount is less than one million dollars and you itemize.

Mortgage Points

For tax purposes, mortgage points are a form of prepaid interest, and as such, can be deducted in full during the same year in which they were purchased. So, if you bought a home in 2016 and purchased points, you can deduct that entire amount on your 2016 tax return.

Points purchased when refinancing work differently. These points are deducted over the life of the loan. So, if you refinanced to a 30-year fixed, you can deduct 1/30th of your points each year for 30 years.

Property Tax

Property tax is tax deductible, but many people neglect to take this deduction because they rarely pay their property tax directly – it’s normally paid out of an escrow account. You can find the amount you paid in property tax by reviewing your annual statement sent to you by your lender each year.

Home Improvements

Home improvements are also tax deductible, but there is a caveat: The home improvements must add value to the home – routine maintenance does not qualify. So, if you have made or plan to make, capital improvements to your home like adding a deck, installing a new roof or redoing the kitchen, make sure to save your receipts; you’re going to need them come tax time.

These are just four areas that people normally can deduct from their taxes with little to no problems. There are more, but they can be a bit more complex and, normally, require the assistance of a tax professional to deduct correctly.

Photo courtesy of Sal Falko at Flickr.com.

Home Ownership May Reduce Your Tax Obligations

by Maureen Cool

Reducing your overall tax debt may be one of the benefits of owning a home. State and federal governments offer many tax incentives to homeowners, and your accountant will certainly be able to help you determine which ones you qualify for. Here are the most common home-ownership-related deductions you can use to reduce your tax debt.

You can deduct the interest payments on both your primary residence and secondary residence if your total loan amount is less than one million dollars and you itemize. Deducting the interest you pay on your home mortgage is one of the oldest and most-commonly used methods to save money on your taxes. This method is especially effective during the early years – as most loan payment schedules are structured to be more interest heavy in the early years.

If you bought a home in 2015 and purchased points, you can deduct that entire amount on your 2015 tax return. For tax purposes, mortgage points are a form of prepaid interest, and as such, can be deducted in full during the same year in which they were purchased. Points purchased when refinancing work differently. These points are deducted over the life of the loan. If you refinanced to a 30-year fixed, you can deduct 1/30th of your points each year for 30 years.

Property taxes are tax deductible, but many people neglect to take this deduction because they rarely pay their property taxes directly – they’re normally paid out of an escrow account. You can find the amount you paid in property taxes by reviewing your annual statement sent to you by your lender each year.

If you have made or plan to make capital improvements to your home like adding a deck, installing a new roof or redoing the kitchen, make sure to save your receipts; you’re going to need them come tax time. Home improvements are tax deductible, but there is a caveat: the home improvements must add value to the home – routine maintenance does not qualify.

There are more deductions but they can be a bit more complex and normally require the assistance of a tax professional to deduct correctly. The above items that people normally can deduct from their taxes result in little to no problems. I will be happy to answer any questions you may have, and/or help you determine the value of your home. Contact me today for a consultation.

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

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Maureen Cool is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy Chris Potter/Flickr.com

Can Unreimbursed Employee Business Expenses Impact Mortgage Qualifying? 

Commonly known as a 2106 expense due to the associated IRS tax form, this is a frequent question and one that has a major impact on the loan qualifying process. Read more here...

Whether it be USDA, FHA, Conventional or VA Loans, just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Article courtesy of:

Sean Stephens
Metroplex Mortgage Services, Inc.

Email:  SeanS@MPLX.org
8622 North Himes Avenue Tampa, Florida 33614
Toll Free: (800)806-9836  - USDALoanPro
Alabama, Florida, Tennessee NMLS: #185264
Texas NMLS: #356690

The House is Yours! Now What?

by Maureen Cool

The big day has finally come. Inspections have been completed, homeowner's insurance is in place, and an hour before closing, you do the final walk though of the home of your dreams. Now, you sit at the closing table. You are nervous as you look at the stack of papers to sign and then finally the last signature is complete. The keys are given to you and the home is finally yours!

You may have depleted some or all of your savings in the home buying process. There is so much more you want to do now that you are moved in. It is easy to do more than you can afford or budgeted for. Don't be tempted. Before you make this mistake, here are some easy tips to help you build your savings back up.

1. Your first priority should be to rebuild your emergency savings. Homeownership brings unexpected expenses. Fund should be available to take care of the unexpected. This is more important than updating or redecorating your new home.

2. Do make a list of the updating and decorating you want to do. It is tempting to buy new things for your home. But, spend only the money you have budgeted. It is easy to splurge and charge lots of pretty things. Don't be tempted.

3. Keep your great credit score that made it possible for you to buy your home. Automate your payments. Late payments are more damaging to your credit now than ever before.

4. Keep good records of your home, especially repairs, replacements and warranties. Your HUD statement from closing may be needed at tax time for tax deductions. It is easier to keep good records than trying to reconstruct your deductions at tax time.

5. Don't forget to file for Homestead Exemption. The deadline for filing is March 1.

6. You may have gotten a great deal on your new home. But, in this crazy market, home values could still decrease. In the Fall when the new tax values notices are mailed, you will have a window of opportunity to appeal the tax value of your home. If you ever have a question about the tax value of your home, contact me at http://www.mysebringhomevalue.com.

Remember, I have a many service professionals that can help you with improvements and updating for your home. In addition if you need a list of professional for taxes, insurance or other services, please call me anytime for recommendations.

 

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Appliance Rebate Program

by Maureen Cool

If you missed the government's Cash for Clunkers rebate program, you still have a chance to participate in the appliance rebate program that can help homeowners with some cash back this year.

The Energy Star Appliance Rebate program, passed last February as part of the American Recovery and Reinvestment Act. How it works is that it will give rebates to consumers who replace certain home appliances with energy-efficient models. The new program underscores the Obama Administration’s commitment to make American homes more energy efficient, while helping to support the nation’s economic recovery

This Energy Efficient Appliance Rebate Program began Jan. 1 and the U.S. Government has set aside $300 million for the appliance rebate program.Each state has their own appliance rebates programs and the authority to handle most of the details separately.  It provides rebates for qualifying energy-efficient appliances.select ENERGY STAR qualified appliances. These appliances may include:

  • central air conditioners
  • heat pumps (air source and geothermal)
  • boilers
  • furnaces (oil and gas)
  • room air conditioners
  • clothes washers
  • dishwashers
  • refrigerators/freezers
  • water heaters

The U.S. Government has given each State the authority to develop their own government appliance rebate program using the government’s guidelines. Individual states can decide the amounts of the appliance rebates up to $200 (reported) per selected appliance that is Energy Star qualified. Each state develops it’s own rebate program and may choose which appliances to include as long as it is on the list of approved Energy Star appliances that the U.S. Government listed. States will receive formula-based funding in order to start or continue an already established ENERGY STAR appliance rebate program

 

 


 

Avoiding Toxins In Your Home

by Maureen Cool

When you think of toxins you might think of air pollution or poisons but the reality is that there may be many toxins right in your own home. If you or someone in your home has allergies or asthma, these toxins can make it even more difficult to breathe. Below are a a list of simple changes that you can make to make your home free of toxins.

Cleaners: There are many cleaners that you should avoid such as bleach and ammonia, they contain irritants that can cause breathing difficulties. Many other cleaners that we use on a daily basis contain many powerful cleaning agents that contain toxins that can cause problems. The good news is that there are many alternatives on the market today that do just as a good of job cleaning but are much more safer to both the environment but to those that live in your home!

Paint: Paint has traditionally been  high odor substance that contains potential toxins. There are many 'green' paint options available today that are not only low odor but that have no cancer causing toxins (also called VOCs). Look for paints that have been certified by Green Seal.  Benhamin Moore also has a Natua line of paints that are just as rich and durable, just water based and much safer.

Air Fresheners: Everyone loves their home to smell fresh, but items like air fresheners, candles and fragrances contain synthetic components that can cause irritation to the lungs. In addition to irritants some can contain a chemical called 'phthalates', which has been shown to cause birth defects, hormone disruption and reproduction problems. Look for alternative candles or scents that have essential oils instead of synthetic fragrances.

Furniture: Many people don't think of furniture as being toxic but if your furniture is old and worn it main contain flame retardants called PBDE's that can cause serious health problems. These chemicals can effect brain, nervous or reproduction problems. Be informed that stain repellents on furniture can also contains toxic chemicals such as formaldehyde. Do your research before putting any repellent on your furniture.

Displaying blog entries 1-6 of 6

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Photo of Maureen Cool, CRS, CIPS, RSPS Real Estate
Maureen Cool, CRS, CIPS, RSPS
RE/MAX Realty Plus
809 US 27 South
Sebring FL 33870
863-873-7243
Fax: 863-385-5897

Maureen Cool * RE/MAX Realty Plus
809 US 27 South, Sebring, Florida 33870
Office: 863-385-0077 X215
Direct: 863-873-7243
Fax: 863-385-5897

 
           


 

Maureen Cool of RE/MAX Realty Plus offers real estate services to buyers, sellers, relocation's in the Highlands County real estate area.

Including Polk County, Hardee County, Okeechobee County, Desota County and Glades County.


Whether you are looking for luxury, investment, second home, commercial, bank owned, foreclosures properties Maureen Cool and The Cool Team are your real estate professionals for the entire Central Florida area.
 

Maureen Cool is your Luxury Home Expert in Highlands County. 
She can assist you with your Sebring, Avon Park and Lake Placid real estate needs. 

 

 

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