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Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners

July 2, 2020

last minute tax tips for home owners

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It’s heeeere: tax time.

Granted, this year, the coronavirus pandemic prompted the Internal Revenue Service to extend the usual April 15 deadline to July 15. That might have seemed like plenty of time—and yet here we are, with a mere two weeks to go and a filing window that’s closing fast.

We get it. Maybe you’re a procrastinator. Or maybe you’re a homeowner who, rather than taking the easy-peasy standard deduction, generally tries to save a bundle by itemizing your deductions instead.

Whatever your reason, if you’ve put off filing your taxes until now, don’t panic! You still have options.

Here are three last-minute tax tips for homeowners that could save you plenty of money, headaches, and more.

Tip No. 1: Grab Form 1098

Form 1098, or the Mortgage Interest Statement, is sort of like your home’s W-2: a one-stop shop for your possibly two biggest tax breaks.

  • Mortgage interest: “The biggest real estate tax deduction for most people will be the interest on their home loan,” according to Patrick O’Connor of O’Connor and Associates. Single people can deduct the full interest up to $500,000; for married couples filing jointly, the limit is $1 million if you purchased a house before Dec. 15, 2017. If you bought a home after that date, you will be allowed to deduct the interest on no more than $750,000 of acquisition debt—that’s a loan used to buy, build, or improve a main or secondary home. (Here’s more on how your mortgage interest deduction can help you save on taxes.)
  • Property taxes: This is the second-biggest deduction for most homeowners. Just remember the total amount you can deduct is $10,000, even if you pay way more—and that includes state and local income tax, property tax, and sales tax. (Here’s how to calculate your property taxes.)

You might be eligible for other real estate–related deductions and tax credits, but these are the biggies for most people. If you’re down to the wire on filing, you might just deduct these two and call it a day.

Just remember to make it worth your while. These numbers need to add up to more than the current standard deduction, which jumped to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly.

Tip No. 2: File an extension

If you still need more time to get your taxes together, it’s totally simple and penalty-free to file for an extension until Oct. 15. But don’t get too excited; the IRS still requires you to pay your estimated tax bill by July 15, or else you’ll pay interest on what you owe down the road.

The IRS makes it easy to file for an extension, either online or by mail. On the form, just estimate how much tax you owe. If you’re filing an extension because you need more time to figure out your itemized deductions, one easy shortcut is to just take the standard deduction now—or the same amount you claimed last year. All in all, it’s better to overestimate what you owe, because then you won’t pay any interest. Once you file for real, anything you’ve overpaid will come back to you.

But what if you need an extension because you can’t pay your tax bill? It’s still better to file for an extension with fuzzy numbers than to not file at all.

The IRS has payment plans that can help if you are short on cash. Just file something—blowing the deadline entirely will open you up to penalties as well as interest on your bill. And maybe an audit, too.

Tip No. 3: Hire some help

If you make less than $69,000 a year, you qualify to use free tax prep software from the IRS. Even if you make more than that, there are lots of free or low-cost online tax prep options that should work for anyone with relatively straightforward taxes.

Of course, another option is to find yourself a good accountant.

If paying for a tax preparer sounds extravagant, keep in mind that, according to the U.S. Tax Center, the average cost of getting your taxes done is only $225. This, generally speaking, is money well-spent.

A good accountant can actually save you money by spotting deductions you might not have found on your own, and helping you plan to minimize the next year’s taxes. All in all, that may add up to the best few hundred bucks you’ve ever spent!

Another timesaver: Rather than snail-mailing your accountant your tax forms, snap pictures of them on your smartphone; some apps like CamScanner can do so with scanner-style quality. Accountants don’t need the originals to file.

For next year, remember to prepare

OK, so this year you waited too long and stressed yourself out. If you don’t want a repeat ordeal next year, now is also the time to mend your ways and start tax prep early. Nobody wants to be thinking about taxes all year, of course. But as a homeowner, you can do some things to be better prepared.

So before you do any home maintenance, upgrades, or renovations, research whether there are any tax deductions you could be eligible for.

Start now, and you’ll be sitting pretty to collect on all the various tax perks that come with owning a home rather than pulling out your hair at the last minute.

The post Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners appeared first on Real Estate News & Insights | realtor.com®.

The Best Real Estate Advice of 2019—Back by Popular Demand

December 3, 2019

iStock; realtor.com

Buying, owning, and selling a home can sometimes feel like an emotional roller coaster. There are new processes to navigate and seemingly endless roadblocks to overcome. It’s only natural that you have questions and seek advice along the way. And we’re here to help!

All year long, realtor.com offers detailed advice and guidance to help you navigate just about any real estate topic that you could encounter—from home buying to refinancing to getting ready for a sale and beyond.

Want a refresher? Here’s a look back at eight of our most-read advice pieces of 2019. Click the headlines below to become a more knowledgeable homeowner now and in 2020!

Buy Now, Hate Later: 6 Things in Your New Home That Will Soon Drive You Nuts

You may love these things about your home now, but they could drive you nuts later.

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Purchasing a new home is a long-term financial commitment, and you probably have a list of must-haves for the home. But you’ll likely be living in the place for decades, so before you seal the deal, take a look around to make sure the home will meet your needs for years to come.

Many buyers think they’ve snagged their dream homes, but, down the road, start hating what used to be some of their favorite features.

Look over this list of buyers’ most-wanted features that later drove them nuts to save yourself from buyer’s remorse.

Can’t miss tip: An open floor plan offers little in the way of privacy. This layout style has been a sought-after feature for house hunters, but many homeowners find that an open floor plan means everyone in the home is living on top of one another. Bummer.

5 Unwritten Etiquette Rules Home Buyers Might Not Even Realize Are a Big Deal

Knowing a handful of etiquette rules makes the home-buying process go smoothly.

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Real estate deals come with a set of steps, like the need to get pre-approved for a mortgage and putting down earnest money when you make an offer. Yet along with these set-in-stone directives, there are many unwritten rules that can make or break a deal. Don’t overlook a few etiquette rules when buying a home to keep your deal on track.

Can’t-miss tip: Sign on with a real estate agent before asking the pro to show you homes. A buyer-broker agreement is a legal contract that spells out the relationship between the buyer and real estate agent, and lists the services the agent will provide. It shows that you’re serious about buying a home and committing to working with the specific agent.

If your relationship with your agent doesn’t work out, you can end the agreement and find someone else. It’s poor etiquette to work with more than one agent at the same time.

I Fell in Love With a Fixer-Upper: A Tale of Romance Gone Horribly Wrong

What you really need to know about owning a fixer-upper.

Sally Herigstad

If you’re an HGTV fan, buying a fixer-upper and making it your own may seem like a dream. The reality isn’t always so romantic, however. Dealing with fixer-uppers can be time-consuming and costly.

Sometimes, a buyer falls in love with the home and is willing to take on the risk—and cost and responsibility of repairs and maintenance. One buyer of a fixer-upper shares her real-life story of what it’s like to purchase, fix up, and live in such a home.

Can’t-miss tip: Pets, cigarette smoke, or cooking smells can be off-putting for buyers, but a deep cleaning and leaving the windows open for a bit can usually get rid of these odors. Homes that smell wet and musty could signal a bigger problem—a sign of mold, mildew, or water damage, which could be a costly repair.

6 Surprisingly Petty Issues That Can Sabotage a Home Sale

These petty issues could sabotage a home sale.

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Selling a home can sometimes take a while, and major issues understandably delay a sale. But, sometimes, smaller, seemingly petty details can sabotage a home sale, too. Here are a few issues to get in check before putting your home on the market.

Can’t-miss tip: Specify whether window treatments are included in the sale. As a seller, make it clear to buyers if you plan to take drapes, blinds, and curtain rods with you when you move—and whether you plan to offer replacements.

Outdated Mortgage Advice You Should Ignore Right Now

Is the mortgage advice you’re getting outdated?

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Mortgage loan requirements, down payment rules, tax laws, and the overall financial climate can change from year to year. It may be tempting to seek advice from parents or others who have purchased homes before, but their guidance could be outdated and inaccurate. Beware!

With mortgage rates at an all-time low, it may be a great time to buy. Just be sure to have a firm understanding of what you can afford and your overall financial situation, and stay up to date with the current mortgage requirements. Talk to your lender and real estate agent over friends and family. Sorry, friends and family.

Can’t-miss tip: You probably don’t need a 20% down payment. Buyers with a good credit score may need only a 3% down payment to secure their dream home. Shopping around to see what different lenders offer and require will help you get the best mortgage terms.

5 Questions to Ask Your Mortgage Lender Before Refinancing Your Home

Before you refinance, be sure to ask the right questions.

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Should I refinance? That’s a question on many homeowners’ minds these days, especially as mortgage interest rates continue to drop.

Along with a lower interest rate, refinancing also brings a lower monthly payment, which means you could pay off the loan faster and tap into the home’s equity. But there are several questions you should ask a lender before refinancing to make sure it’s the best financial decision for you in the long run.

Can’t-miss tip: You’ll have to pay closing costs when you refinance. Individual lenders can provide the exact amount of money you’ll need to bring to closing, but homeowners can expect to pay 2% to 3% of the loan amount to refinance.

8 Surprising Things You Should Never Put in the Washing Machine

It’s tempting to load everything in the washing machine for cleaning. While the powerful appliance is adept at keeping clothing, towels, and linens spotless, some items could be destroyed when put through the spin cycle. Others could destroy your machine.

Not sure what can go in the washer and what can’t? Read our story!

Can’t-miss tip: Keep king-size comforters out of the washer, but pillows can go in. Large comforters are usually too big for typical at-home washing machines. They could cause the water to overflow and break the machine. It’s best to take big comforters and blankets to a laundromat and wash in the industrial-size machines.

DIY Flops: The Most Costly and Time-Consuming Projects People Attempt and Fail

DIY fails can be time-consuming and costly to fix.

sturti/iStock

Pinterest and HGTV showcase stylish homes and inspire homeowners to take on DIY projects to spruce up their spaces. But these platforms also tend to make projects look a lot easier than they are. And in fact, the opposite is often true: They can cost more and take more time than you think. And, if a project fails, you’ll end up with the added cost of hiring someone to fix the mistake.

Can’t-miss tip: Installing new floors is the most expensive and time-consuming project to fix.  Floors must be level, and the space must be measured meticulously so that new flooring fits perfectly. Making a mistake early in the process can cause many problems down the road.

The post The Best Real Estate Advice of 2019—Back by Popular Demand appeared first on Real Estate News & Insights | realtor.com®.

9 Things I Wish I Had Known About Owning My First Home (Before I Bought It)

November 18, 2019

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Years before I ever dreamed of homeownership for myself, I was an HGTV connoisseur. In college, I double majored in “Property Virgins” and “House Hunters” and spent hours glued to the TV with my roommate, ogling other people’s granite countertops.

Fast forward nearly a decade, and the time had arrived for me to purchase my own home. (No granite countertops here—my house was more like the “before” scene in an episode of “Fixer Upper”).

Not surprisingly, TV homeownership didn’t prepare me for the real thing. There are lots of lessons I’ve had to learn the hard way.

If you’re gearing up for your own journey into homeownership, turn off the TV and gather ’round. I’ll fill you in on a few things I wish I had known beforehand, and a few surprises (some happy, some frustrating) that I encountered along the way.

1. A beautiful yard takes work

That lawn’s not going ti cut itself

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I never met a succulent that I didn’t kill. Even my fake plants are looking a little wilted right now. But even though I don’t have a green thumb, landscaping and yard maintenance are forever on my to-do list.

Each spring, I spray Roundup with impunity, attempting (and failing) to conquer the weeds. My husband handles mowing and edging.

I’ve slowly started to learn which plants can endure abuse, neglect, and a volatile Midwestern climate. I still have a long way to go in my landscaping journey, but all this work has given me a new appreciation for other people’s lush, beautiful lawns.

When you’re house hunting, keep in mind that those beautiful lawns you see—and that outdoor space you covet—come at a steep price. Either your time and frustration, or a hefty bill for professional landscapers, will be necessary to keep things presentable.

2. You might get a bill for neighborhood improvements

Your property taxes should pay for every improvement to the neighborhood, right? Not necessarily.

When my neighbors came together to petition the city for a speed bump on our busy street, the cost was passed on to us homeowners. It wasn’t covered by property taxes, so we got a bill in the mail a few months later. Surprise!

When you’re preparing to buy a house, make sure you budget for homeownership expenses—not just repair and HOA costs, but those pesky fees that crop up when you least expect them.

3. Brush/trash removal? It works differently in every city

You might not be able to just leave your leaves on the curb…

Instants/iStock

As a kid, I spent many fall weekends scooping leaves into yard waste bags that we left on the curb for pickup. But when I became a homeowner, I realized that my early brush with brush removal was unique to the suburb where I grew up. Every city handles it differently, if the city handles it at all.

In Milwaukee, where I live, homeowners can put leaves on the curb for pickup on designated days. For big branches, you need to request a pickup, or potentially dispose of them yourself. Check with your city to find the ordinances and regulations where you live.

4. You’ll want to clean (or hire someone to clean) your nasty windows

Window maintenance was never on my radar as a renter, probably because I never had more than a few windows in an apartment. But then I became the proud owner of many, many windows—and all of them were coated in a thick film of gunk after years of neglect.

After we moved in, I started to tackle the cleaning on my own. But I quickly realized I was getting nowhere fast, and there was no way I could safely clean the exterior windows up in the finished attic.

So, I swallowed my pride and hired window washers. It was some of the best money I’ve ever spent.

5. You may feel a sudden urge to stock up on seasonal decorations

I never looked twice at a $50 wreath or decorative gourd before becoming a homeowner. Now, I have a burgeoning collection of lawn ornaments in the shape of snowmen and spooky cats. Sometimes I don’t even know who I am anymore.

6. You’ll need to create a budget for Halloween candy

Stock up…

leekris/iStock

At least I did in my Halloween-loving neighborhood, where the trick-or-treaters come out in droves.

I spent upward of $100 on candy my first year as a homeowner, and most of it was purchased in a panic at the Dollar Store after I noticed that our supply was dangerously low just halfway through the evening.

Now, I stock up in advance and shop with coupons to save a few bucks.

7. DIY renovation is equally rewarding and soul-crushing

Maybe just call someone next time…

neirfy/iStock

For the first few months after we closed on our house, my husband and I spent every free hour after work and on the weekends ripping out carpeting, pulling nails one by one from the hardwood floors, and scrubbing away at generations’ worth of grime in the bathrooms and kitchen. It was some seriously sick stuff.

Being frugal and ambitious means we can accomplish a lot on a small budget. But acting as our own general contractors became a full-time job on top of both of our full-time jobs.

Simple pleasures like “having a social life” or “Friday night with Netflix” became distant memories. It’s easy now to say it was all worth it, but at the time, I daydreamed about winning the lottery and hiring a team of pros to handle our rehab.

8. My impulse to check real estate listings lingered for a while

When I started house hunting, I obsessively searched for new home listings every day, poring over MLS descriptions and swiping through photos. Reaching for my phone to refresh the realtor.com app became muscle memory.

But after we closed on our house, my impulse to follow the market didn’t disappear overnight. Even though I was a homeowner, I also had a phantom limb where “checking the real estate listings” used to be.

A friend of mine put it best when she wrote about the sensation of loss she experienced when she “no longer had an excuse to occupy [her] free time with these real estate apps.” It’s surprisingly challenging to turn off your home-buying brain after months of being on high alert.

9. You’ll never want to go back to sharing walls

I like my neighbors. I like them even more because, for the most part, I can’t hear them. Gone are the days of people above me making bowling sounds late at night.

Now, I enjoy the sweet, sweet silence of detached living—no adjacent neighbors blasting music or loudly quarreling. All the yard work in the world is worth it for this level of quiet.

The post 9 Things I Wish I Had Known About Owning My First Home (Before I Bought It) appeared first on Real Estate News & Insights | realtor.com®.

When Do You Need to Get a Quitclaim Deed?

November 9, 2019

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Are you curious about the terms “quitclaim,” “grantor,” and “grantee”? These types of deeds and specific terms may come up if you’re transferring property between family members or spouses.

If you are selling your home now, you may not remember that you signed and received a deed when you purchased your property, such as a warranty deed or quitclaim deed.

The particular real estate deed provides proof of ownership for the buyer and transfers the title or deed to you, regardless of who the property owner (or co-owner) was before you.

2 types of deeds to transfer ownership of real property

The legal document that transfers ownership of the property can be a warranty deed or a quitclaim deed.

Warranty deed: Used in most real estate sales transactions, this deed says that the grantor (previous owner) is the owner of the property and has the right to transfer the property to you (the grantee). In addition, the deed serves as a statement that there are no liens against the property from a mortgage lender, the Internal Revenue Service, or any creditor, and that the property can’t be claimed by anyone else. Title insurance provides the financial backup to the warranty deed, and requires a title search to verify that no other claims, encumbrances, easements, or liens on the property are outstanding.

Quitclaim deed: Used when a real estate property transfers ownership without being sold. No money is involved in the transaction, no title search is done to verify ownership, and no title insurance is issued. A quitclaim deed real estate transaction sometimes occurs between family members.

When to use a quitclaim deed

Quitclaim deeds are most often used to transfer property between family members. Examples include when an owner gets married and wants to add a spouse’s name to the title or deed, or when the owners divorce and one spouse’s name is removed from the title or deed. In other cases, a quitclaim deed can be used when parents transfer property to their children or when siblings transfer property to each other.

Some families or parties opt to put their real property into a family trust, and a quitclaim deed can be used then as well.

Another time that a quitclaim deed might be used is when a title insurance company finds a potential additional owner of a real property and wants to make certain that this person doesn’t make a future claim of ownership.

In that case, the insurance company would ask that person to sign a quitclaim deed.

It is important to recognize that a quitclaim deed impacts only the ownership of the house and the name on the property deed or title, not the mortgage. For instance, in the case of a divorce, if both ex-spouses’ names are on the home mortgage loan, they are both still responsible for the mortgage payments, even if a quitclaim deed has been filed.

Quitclaim deed basics regarding grantors and grantees

The rules about how a quitclaim deed is handled vary by jurisdiction, but generally you need to include the legal description of the property being transferred, the date of the transfer, and the names of the “grantor” and “grantee.”

Not all states require you to record a quitclaim deed, but it’s wise to have the deed signed by the grantor and grantee and notarized in front of a notary public, then copied and recorded at the county recorder or county clerk’s office.

The post When Do You Need to Get a Quitclaim Deed? appeared first on Real Estate News & Insights | realtor.com®.