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Own a Home? Check Out These 8 Tax Breaks | Bedford NY Real Estate

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Tax time clock

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.

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via zillowblog.com

The Value of Local SEO to Small Businesses | Bedford NY Realtor

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SEO can be challenging for small businesses. They must compete for the same market share against larger brands that often have more prestige, brand recognition, and consumer affinity.

That doesn’t mean that organic search is out of reach for small businesses as a powerful inbound marketing channel with high potential for return. In order to compete with large brands, small business owners must have an SEO strategy that offsets the often large difference in marketing budget. Because small businesses will not be able to outspend their larger counterparts on media acquisition, they must take a much more targeted and refined approach.

When it comes to short-tail SEO—general phrases with a high amount of search volume—the search engine results pages are dominated by big brands. There is little that a small business marketer with limited budget can do to change these results.

Despite various limitations, small businesses can gain meaningful search engine result real estate with a focus on areas of lowered competition. When geography is taken into account, there is often a much smaller big-brand presence in search results. That opens a window of opportunity for small businesses to gain useful organic search visibility.

via searchenginejournal.com

Link Between Credit and Mortgages: Not What You Think | Bedford Real Estate

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Yet some of the results are not exactly what one might expect. Mississippi, with a household income in the low $40,000s, has a higher median credit score on Mortgage Marvel’s list than the national average of 684.

Rick Allen, COO of Mortgage Marvel, cautions that there’s a story underlying the data that might not be obvious to the naked eye.

“There’s a little bit of self-selection going on here,” said Allen. “The people with not-as-good scores don’t apply, because they think without stellar credit they won’t qualify.”

Indeed, while income is a good indicator of where credit scores will end up, the price of real-estate seems to determine who applies, and how good their credit is.

This is especially true of places at the upper end of Mortgage Marvel’s list. While Maryland regularly ranks as the top state for personal income, the state doesn’t make the top ten in the best credit scores for mortgage applicants. That is because Maryland ranks out of the top third for states with the highest average listing price, according to Trulia.com.

California and Hawaii are both ranked among the top four states for average home price.

(Read more: Renting Beats Owning, But Both Take a Bigger Slice)

Those applicants with scores in the mid-700s, said Allen, “are people who can afford a $500,000 home.”

At the bottom of list, income is more of a determinant. In the middle, each one seems to have its story to tell.

South Dakota, number 36 on Trulia’s list for average listing price, ranks at 24 for average credit score. The result, as Allen pointed out, is due to incomes inflated by the upper Midwest energy boom.

via cnbc.com