Taxes Category

Tax Time | Red Flags That Increase Chances of a Tax Audit

posted on March 30th, 2015 | filed under: Business Referral, Good People, Taxes

taxtimeclockIf you are in need a referral for a qualified tax consultant, please call me and I can introduce you to someone I know and trust.

Kiplinger’s 12 “red flags” that could increase your chances of a tax audit:

  • Making Too Much Money – Your chances of being audited are increased if you make more than $200,000.
  • Failing to Report All Taxable Income – The IRS gets copies of all of your 1099s and W-2s. If things don’t match up, it’s quickly detected in the IRS’s computer system. If you receive a 1099 that reports incorrect income, ask the company you worked for to file a correction right away.
  • Taking Large Charitable Deductions – If your charitable deductions are too large in comparison to the amount of money you make, it raises a red flag.
  • Claiming Home Office Deductions – The space you claim for working at home must be used solely for work purposes, on a regular basis.
  • Claiming Rental Losses – The IRS takes a close look at rental real estate losses written off by taxpayers who say they are real estate professionals. Or, if your adjusted gross income exceeds IRS guidelines for this deduction, it raises a red flag.

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posted by Jeff DeChamplain // Leave A Comment

May 2012 U.S. Economic and Housing Market Outlook

posted on May 24th, 2012 | filed under: Buying Strategies, Cardiff, Carlsbad, Del Mar, Encinitas, Good People, Loving the Lifestyle, NoCo SD Market Conditions, Rancho Santa Fe, Solana Beach, Successful Selling, Taxes, Trust & Probates, Uncategorized

Freddie Mac released recently its U.S. Economic and Housing Market Outlook for May showing for the most part encouraging signs with the release of several first-quarter 2012 economic indicators.

Outlook Highlights
•Initial estimates for first-quarter 2012 economic growth was 2.2 percent, slower than the previous quarter, but better than three of the past four quarters.
•Personal consumption expenditures grew at a 15.3 percent annual rate reflecting continuing strength in consumer durables such as cars and kitchen appliances.
•Residential fixed investment like new housing construction and remodeling expenses have been a net positive contributor to growth for four straight quarters; however, it remains weak for this stage of the economic recovery compared with previous business cycles.
•Home prices at or near a trough in many markets bodes well for further declines in delinquency rates.
•Fixed-rate mortgage rates are the lowest in more than 60 years, providing extraordinary home-buyer affordability in many areas and likely translating into a sales pickup relative to last year.

According to Frank Nothaft, Freddie Mac, vice president and chief economist, “Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery. While not uniformly positive, for the most part the data trend in the right direction.”

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March Pending Home Sales Rise, Signaling Another Step in the Right Direction

posted on April 27th, 2012 | filed under: Buying Strategies, Cardiff, Carlsbad, Del Mar, Encinitas, Good People, Loving the Lifestyle, NoCo SD Market Conditions, Rancho Santa Fe, Solana Beach, Successful Selling, Taxes, Trust & Probates, Uncategorized

Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9. The data reflects contracts but not closings.

The index is now at the highest level since April 2010 when it reached 111.3.

Lawrence Yun, NAR chief economist, said 2012 is expected to be a year of recovery for housing. “First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,” he said.

“The housing market has clearly turned the corner. Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas as the year progresses,” Yun said.

The PHSI in the Northeast slipped 0.8 percent to 78.2 in March but is 21.1 percent above March 2011. In the Midwest the index declined 0.9 percent to 93.3 but is 16.9 percent higher than a year ago. Pending home sales in the South rose 5.9 percent to an index of 114.1 in March and are 10.6 percent above March 2011. In the West the index increased 8.7 percent in March to 108.0 and is 9.0 percent above a year ago.

Copyright© 2012 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia

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Tax Benefits of Homownership

posted on February 3rd, 2012 | filed under: Buying Strategies, Taxes, Uncategorized

Before we know it, tax time will be here – filing date is April 17th, 2012. Homeownership has many benefits, including tax deductions for those who qualify. Below are six of the top tax advantages of owning a home.

1. Write off the interest you paid on a mortgage of up to $1 million, as long as the property is your main or secondary residence. This deduction really pays off during the first years of owning the home, when interest accounts for most of your payment, also known as home acquisition debt.

2. Deduct the interest you pay on home equity loans of up to $100,000, so long as you are not subject to the alternating minimum tax or AMT (unless you use the loan for home improvements).

3. Deduct your state and local property taxes from your federal income taxes, where applicable.

4. Deduct your home buying expenses, including loan origination fees, prorated interest on a new loan or prorated property taxes.

5. If you sold your home in 2011, you may not have to pay federal income taxes on the earnings from the sale, up to $250,000 for single filers or $500,000 for joint filers, as long as you used the home as a primary residence for at least two of the five years prior to selling. Some states including California offer this as well.

6. Rent your home out for up to 15 days and keep the income generated—it’s not taxable.

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Jeff DeChamplain