Thursday, March 28, 2013
Tuesday, March 26, 2013
Monday, March 25, 2013
Friday, March 22, 2013
Wednesday, March 20, 2013
Tuesday, March 19, 2013
Price Changes by State
Here are the year over year price changes by state per the FHFA.
Real indication of all real estate being local.
Real indication of all real estate being local.
Friday, March 15, 2013
Monday, March 11, 2013
Advice for Home Sellers from President of PA Association of Realtors
Sparkling clean and de-cluttered key to selling
Posted By Bette McTamney, CRB, CRS, GRI, SRES On March 11, 2013 @ 6:00 am In Association News
No Comments
PAR President Bette McTamney
We’re seeing encouraging signs of recovery in the housing market throughout Pennsylvania, according to recent statewide data. Pending sales are up more than 10 percent and closed sales are up 14 percent. National reports are talking about a gradual turnaround in the market.In other areas, many of you are seeing a reduction in inventory and fewer foreclosures. As I encourage more homeowners to list their houses, I like to remind them that in today’s market, it’s critical to show their houses in the best possible condition.
I don’t know about you, but I find it frustrating when I’m showing a house and I find clothes tossed about in the bedrooms and wet towels on the floor of the bathroom.
It’s tough to convince sellers that potential buyers make up their minds about a house from the moment we park at the curb. You and I know that — we’re in the car with them and we hear them comment about the overgrown shrubbery and the peeling paint on the front porch the minute we stop the car.
I like to tell my sellers to de-clutter, clean like crazy and leave when their house is being shown. As they box up some of their belongings, they’ve not only got a jump on the packing process, but they really can see some of the things that might need repaired, updated or replaced.
Many of you may have read articles [1] written for NAR [2] by Barb Schwarz [3], the Creator of Home Staging® [4] . She says cleaning the house is like detailing your car. It really needs to be that clean.
One of my favorite comments from Barb is, “The way you live in your home and the way you market and sell your house are two different things. Buyers only know what they see, not the way it’s going to be. They don’t have an imagination when it comes to buying their home.”
It takes a skilled Realtor® to gently remind their sellers that some hard work needs to go into a property to get it ready to sell. It’s probably easier to remind them that if they want to get the best price for their home, they’re going to have to put some elbow grease into fixing up the house to have it show at its best against other properties on the market. Or as Barb says, “Longevity on the market means one thing… a reduction in price.”
Posted By Bette McTamney, CRB, CRS, GRI, SRES On March 11, 2013 @ 6:00 am In Association News
No Comments
PAR President Bette McTamney
We’re seeing encouraging signs of recovery in the housing market throughout Pennsylvania, according to recent statewide data. Pending sales are up more than 10 percent and closed sales are up 14 percent. National reports are talking about a gradual turnaround in the market.In other areas, many of you are seeing a reduction in inventory and fewer foreclosures. As I encourage more homeowners to list their houses, I like to remind them that in today’s market, it’s critical to show their houses in the best possible condition.
I don’t know about you, but I find it frustrating when I’m showing a house and I find clothes tossed about in the bedrooms and wet towels on the floor of the bathroom.
It’s tough to convince sellers that potential buyers make up their minds about a house from the moment we park at the curb. You and I know that — we’re in the car with them and we hear them comment about the overgrown shrubbery and the peeling paint on the front porch the minute we stop the car.
I like to tell my sellers to de-clutter, clean like crazy and leave when their house is being shown. As they box up some of their belongings, they’ve not only got a jump on the packing process, but they really can see some of the things that might need repaired, updated or replaced.
Many of you may have read articles [1] written for NAR [2] by Barb Schwarz [3], the Creator of Home Staging® [4] . She says cleaning the house is like detailing your car. It really needs to be that clean.
One of my favorite comments from Barb is, “The way you live in your home and the way you market and sell your house are two different things. Buyers only know what they see, not the way it’s going to be. They don’t have an imagination when it comes to buying their home.”
It takes a skilled Realtor® to gently remind their sellers that some hard work needs to go into a property to get it ready to sell. It’s probably easier to remind them that if they want to get the best price for their home, they’re going to have to put some elbow grease into fixing up the house to have it show at its best against other properties on the market. Or as Barb says, “Longevity on the market means one thing… a reduction in price.”
Wednesday, March 6, 2013
Tuesday, March 5, 2013
Returns on various home improvement projects
Exterior Replacement Projects Provide Biggest Return on Investment for Homeowners, Say REALTORS®
Posted By susanne On March 4, 2013 @ 4:25 pm In Business Outlook,Consumer News and Advice,Home Owner News,Homeowner's Toolkit,Real Estate Information,Real Estate News,Real Estate Trends,Today's Marketplace,Today's Top Story,Today's Top Story - Consumer
Comments Disabled
[1]Homeowners looking for the most return on their investment when it comes to remodeling should consider exterior replacement projects. According to the 2013 Remodeling Cost vs. Value Report, REALTORS® rated exterior projects among the most valuable home improvement projects.
“REALTORS® know that curb appeal projects offer great bang for your buck, because a home’s exterior is the first thing potential buyers see,” says National Association of REALTORS® President Gary Thomas. “Projects such as siding, window and door replacements can recoup more than 70 percent of their cost at resale. REALTORS® know what home features are important to buyers in your area and can provide helpful insights when considering remodeling projects.”
Results of the report are summarized on NAR’s consumer website HouseLogic.com, which provides information on dozens of remodeling projects, from kitchens and baths to siding replacements, including the recouped value of the project based on a national average. According to the Cost vs. Value Report, REALTORS® judged a steel entry door replacement as the project expected to return the most money, with an estimated 85.6 percent of costs recouped upon resale. The steel entry door replacement is the least expensive project in the report, costing little more than $1,100 on average. A majority of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects; all of these are estimated to recoup more than 71 percent of costs.
Three different siding replacement projects landed in the top 10, including fiber cement siding, expected to return 79.3 percent of costs, vinyl siding, expected to return 72.9 percent of costs, and foam-backed vinyl, expected to return 71.8 percent of costs. Two additional door replacements were also among the top exterior replacement projects. The midrange and upscale garage door replacement were both expected to return more than 75 percent of costs.
According to the report, two interior remodeling projects in particular can recoup substantial value at resale. A minor kitchen remodel is ranked fifth and is expected to return 75.4 percent of costs. Nationally, the average cost for the project is just under $19,000.
The second interior remodeling project in the top 10 is the attic bedroom, which landed at number eight and tied with the vinyl siding replacement with 72.9 percent of costs recouped. With an average national cost of just under $48,000, the attic project adds a bedroom and bathroom within a home’s existing footprint. The improvement project projected to return the least is the home office remodel, estimated to recoup less than 44 percent.
The 2013 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels and replacements in 81 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 15th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood, LLC, was completed in cooperation with NAR.
REALTORS® provided their insights into local markets and buyer home preferences within those markets. The 2013 national average cost-to-value ratio rose to 60.6 percent, ending a six-year decline. The ratio represents nearly a three-point improvement over 2011-2012. Lower construction costs are the principal factor in the upturn, especially when measured against stabilizing house values. In addition, the cost-to-value ratio improved nationally for every project in this year’s report and is higher than it was two years ago for both remodeling and replacement projects.
“A REALTOR® is the best resource for helping homeowners decide what improvement projects will provide the most upon resale in their market,” says Thomas. “Each neighborhood is different, and the desirability and resale value of a particular remodeling project varies depending on where you live. When making a home remodeling decision, resale value is just one factor that homeowners should take into consideration. Consult a REALTOR® to make sure you are making the best decision.”
Most regions followed the national trends; however, the Pacific region—consisting of Alaska, California, Hawaii, Oregon and Washington—once again led the nation with an average cost-value ratio of 71.2 percent, due mainly to strong resale values. The next best performing regions were West South Central, South Atlantic and East South Central. These regions attribute their high ranking to construction costs that were lowest in the country. While still remaining below the national average, most remaining regions showed strong improvement over last year. These are Mountain, New England, East North Central, Middle Atlantic and West North Central.
To read the full project descriptions and access national and regional project data, visit www.costvsvalue.com [2]. “Cost vs. Value” is a registered trademark of Hanley Wood, LLC.
Posted By susanne On March 4, 2013 @ 4:25 pm In Business Outlook,Consumer News and Advice,Home Owner News,Homeowner's Toolkit,Real Estate Information,Real Estate News,Real Estate Trends,Today's Marketplace,Today's Top Story,Today's Top Story - Consumer
Comments Disabled
[1]Homeowners looking for the most return on their investment when it comes to remodeling should consider exterior replacement projects. According to the 2013 Remodeling Cost vs. Value Report, REALTORS® rated exterior projects among the most valuable home improvement projects.
“REALTORS® know that curb appeal projects offer great bang for your buck, because a home’s exterior is the first thing potential buyers see,” says National Association of REALTORS® President Gary Thomas. “Projects such as siding, window and door replacements can recoup more than 70 percent of their cost at resale. REALTORS® know what home features are important to buyers in your area and can provide helpful insights when considering remodeling projects.”
Results of the report are summarized on NAR’s consumer website HouseLogic.com, which provides information on dozens of remodeling projects, from kitchens and baths to siding replacements, including the recouped value of the project based on a national average. According to the Cost vs. Value Report, REALTORS® judged a steel entry door replacement as the project expected to return the most money, with an estimated 85.6 percent of costs recouped upon resale. The steel entry door replacement is the least expensive project in the report, costing little more than $1,100 on average. A majority of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects; all of these are estimated to recoup more than 71 percent of costs.
Three different siding replacement projects landed in the top 10, including fiber cement siding, expected to return 79.3 percent of costs, vinyl siding, expected to return 72.9 percent of costs, and foam-backed vinyl, expected to return 71.8 percent of costs. Two additional door replacements were also among the top exterior replacement projects. The midrange and upscale garage door replacement were both expected to return more than 75 percent of costs.
According to the report, two interior remodeling projects in particular can recoup substantial value at resale. A minor kitchen remodel is ranked fifth and is expected to return 75.4 percent of costs. Nationally, the average cost for the project is just under $19,000.
The second interior remodeling project in the top 10 is the attic bedroom, which landed at number eight and tied with the vinyl siding replacement with 72.9 percent of costs recouped. With an average national cost of just under $48,000, the attic project adds a bedroom and bathroom within a home’s existing footprint. The improvement project projected to return the least is the home office remodel, estimated to recoup less than 44 percent.
The 2013 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels and replacements in 81 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 15th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood, LLC, was completed in cooperation with NAR.
REALTORS® provided their insights into local markets and buyer home preferences within those markets. The 2013 national average cost-to-value ratio rose to 60.6 percent, ending a six-year decline. The ratio represents nearly a three-point improvement over 2011-2012. Lower construction costs are the principal factor in the upturn, especially when measured against stabilizing house values. In addition, the cost-to-value ratio improved nationally for every project in this year’s report and is higher than it was two years ago for both remodeling and replacement projects.
“A REALTOR® is the best resource for helping homeowners decide what improvement projects will provide the most upon resale in their market,” says Thomas. “Each neighborhood is different, and the desirability and resale value of a particular remodeling project varies depending on where you live. When making a home remodeling decision, resale value is just one factor that homeowners should take into consideration. Consult a REALTOR® to make sure you are making the best decision.”
Most regions followed the national trends; however, the Pacific region—consisting of Alaska, California, Hawaii, Oregon and Washington—once again led the nation with an average cost-value ratio of 71.2 percent, due mainly to strong resale values. The next best performing regions were West South Central, South Atlantic and East South Central. These regions attribute their high ranking to construction costs that were lowest in the country. While still remaining below the national average, most remaining regions showed strong improvement over last year. These are Mountain, New England, East North Central, Middle Atlantic and West North Central.
To read the full project descriptions and access national and regional project data, visit www.costvsvalue.com [2]. “Cost vs. Value” is a registered trademark of Hanley Wood, LLC.
Monday, March 4, 2013
Smells that Sell
lls that Sell…
When selling your home, your home shouldn’t just look good, it should smell good as well. Every home has a “smell”…..so make sure your home has a good one. Homeowners are often coached to create pleasing aromas when potential buyers are paying a visit or an open house is scheduled. Recent research reports that simple smells are the best smells to help you sell your home. An important concept to take away from this article….less is more.
The best place to start is with a CLEAN palette.
Baking Soda – It’s safe, cheap, and versatile. Keep an open box in closets and laundry room to absorb odors. Sprinkle on carpets prior to vacuuming.
Open up – Open windows to allow fresh air into your home.
White Vinegar – Mix equal amounts with water in a spray bottle. Lightly spray drapes, carpets, and other fabrics. This is a great odor neutralizer! Placing a bowl of this mixture in a room for several hours will also help to absorb bad odors! Great for burnt food smells, pet odors!
Keep it Clean – Don’t let garbage pile up, clean the litter box daily, put dirty laundry in a closed hamper, clean-up spills promptly, and toss old fruit from baskets on the counter.
Vacuum – Use a fresh vacuum bag to prevent transferring old, stagnant odors trapped in an old bag.
——————————————————–
Once your home is clean, you can create the aromatic environment you desire. In the past, baking cookies, cakes, or bread, lighting candles, and using potpourri were all very popular trends. But now, researchers recommend keeping it SIMPLE and NATURAL. Complex fragrances can actually distract potential buyers. They can become focused on identifying the scent rather than focusing on your home’s fabulous features! Here are some easy, popular suggestions…
Citrus – A powerful deodorizer, it also brings a feeling of more energy! Cut a few quarters of a lemon or lime and toss into the garbage disposal. Run for a minute to deodorize the disposal and to re-fresh your kitchen.
Vanilla – Pure vanilla extract is a comforting aroma. Soak a few cotton balls with vanilla and place in small bowls around the room / home.
Cinnamon/Cloves/Spices – Conjures up memories of holidays and home. Fill a small saucepan with water, add some cinnamon sticks, cloves, a few drops of vanilla or even an orange rind. Simmer on the stove, keeping a close eye on it so the water doesn’t boil down.
Pine/Cedar – Terrific, all-natural fragrance for a mountain home! Decorate with some fresh sprigs of pine or place cedar chips in a bowl. Keep in mind; this may not work very well for a beach home or city residence. It may come across as un-natural and might suggest you are masking other odors.
Homemade Room Spray – Can be personalized and contains fewer chemicals than commercial sprays. Mix 1 cup water, 1 cup vodka (a cheap brand will work), and 15-20 drops of your favorite essential oil…lavender, cinnamon, clove, lemon, or orange are all good choices. Find the mix that works best for you. Put into a spray bottle and use whenever the air needs a burst of freshness! (Keep out of reach, along with your other home cleaners)
Baked Goods – Some folks will still swear by this trick……keep the smell simple and familiar, like home (pumpkin pie, sugar cookies, cinnamon rolls, raisin bread). Be careful not to let them burn!
It’s time to put away the harsh, artificial sprays and fresheners. Here’s a chance to be clean, fresh, and creative.
Keep it all-natural, all organic………….keep it simple!
When selling your home, your home shouldn’t just look good, it should smell good as well. Every home has a “smell”…..so make sure your home has a good one. Homeowners are often coached to create pleasing aromas when potential buyers are paying a visit or an open house is scheduled. Recent research reports that simple smells are the best smells to help you sell your home. An important concept to take away from this article….less is more.
The best place to start is with a CLEAN palette.
Baking Soda – It’s safe, cheap, and versatile. Keep an open box in closets and laundry room to absorb odors. Sprinkle on carpets prior to vacuuming.
Open up – Open windows to allow fresh air into your home.
White Vinegar – Mix equal amounts with water in a spray bottle. Lightly spray drapes, carpets, and other fabrics. This is a great odor neutralizer! Placing a bowl of this mixture in a room for several hours will also help to absorb bad odors! Great for burnt food smells, pet odors!
Keep it Clean – Don’t let garbage pile up, clean the litter box daily, put dirty laundry in a closed hamper, clean-up spills promptly, and toss old fruit from baskets on the counter.
Vacuum – Use a fresh vacuum bag to prevent transferring old, stagnant odors trapped in an old bag.
——————————————————–
Once your home is clean, you can create the aromatic environment you desire. In the past, baking cookies, cakes, or bread, lighting candles, and using potpourri were all very popular trends. But now, researchers recommend keeping it SIMPLE and NATURAL. Complex fragrances can actually distract potential buyers. They can become focused on identifying the scent rather than focusing on your home’s fabulous features! Here are some easy, popular suggestions…
Citrus – A powerful deodorizer, it also brings a feeling of more energy! Cut a few quarters of a lemon or lime and toss into the garbage disposal. Run for a minute to deodorize the disposal and to re-fresh your kitchen.
Vanilla – Pure vanilla extract is a comforting aroma. Soak a few cotton balls with vanilla and place in small bowls around the room / home.
Cinnamon/Cloves/Spices – Conjures up memories of holidays and home. Fill a small saucepan with water, add some cinnamon sticks, cloves, a few drops of vanilla or even an orange rind. Simmer on the stove, keeping a close eye on it so the water doesn’t boil down.
Pine/Cedar – Terrific, all-natural fragrance for a mountain home! Decorate with some fresh sprigs of pine or place cedar chips in a bowl. Keep in mind; this may not work very well for a beach home or city residence. It may come across as un-natural and might suggest you are masking other odors.
Homemade Room Spray – Can be personalized and contains fewer chemicals than commercial sprays. Mix 1 cup water, 1 cup vodka (a cheap brand will work), and 15-20 drops of your favorite essential oil…lavender, cinnamon, clove, lemon, or orange are all good choices. Find the mix that works best for you. Put into a spray bottle and use whenever the air needs a burst of freshness! (Keep out of reach, along with your other home cleaners)
Baked Goods – Some folks will still swear by this trick……keep the smell simple and familiar, like home (pumpkin pie, sugar cookies, cinnamon rolls, raisin bread). Be careful not to let them burn!
It’s time to put away the harsh, artificial sprays and fresheners. Here’s a chance to be clean, fresh, and creative.
Keep it all-natural, all organic………….keep it simple!
Friday, March 1, 2013
Homeowner tax mistakes
With tax season upon us, here are some simple mistakes to avoid:
9 Easy Mistakes Home Owners Make on Their Taxes
By: G. M. Filisko
Published: December 31, 2012
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.
.
9 Easy Mistakes Home Owners Make on Their Taxes
By: G. M. Filisko
Published: December 31, 2012
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.
.
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