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By Cindy Vedder | Agent in Riverside County, CA
  • Don't-Miss Home Tax Breaks

    Posted Under: Financing, Home Ownership  |  February 11, 2013 1:23 PM  |  383 views  |  No comments

    Don't-Miss Home Tax Breaks

    By: Dona DeZube

    Published: January 10, 2013

    From the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns.

    Mortgage interest deduction
    Private mortgage insurance deduction
    Prepaid interest deduction
    Energy tax credits
    Vacation or second home tax deductions
    Home buyer tax credit repayment
    Property tax deduction

    Mortgage interest deduction

    One of the neatest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet.

    Interest you pay on a mortgage of up to $1 million — or $500,000 if you’re married filing separately — is deductible when you use the loan to buy, build, or improve your home.

    If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.

    If you use loans secured by your home for other things — like sending your kid to college — you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.

    PMI and FHA mortgage insurance premiums



    Helpfully, the government extended the mortgage insurance premium deduction through 2013. You can deduct the cost of private mortgage insurance as mortgage interest on Schedule A — meaning you must itemize your return. The change only applies to loans taken out in 2007 or later.

    What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).

    If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you lose 100% of this deduction (10% x 10 = 100%).

    Besides private mortgage insurance, there's government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.

    Prepaid interest deduction

    Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid them along with other mortgage interest.

    If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.

    But if you refinance to get a better rate and term or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the term of the loan. Say you refi for a 10-year term and pay $3,000 in points. You can deduct $300 per year for 10 years.

    So what happens if you refi again down the road?

    Example: Three years after your first refi, you refinance again. Using the $3,000 in points scenario above, you’ll have deducted $900 ($300 x 3 years) so far. That leaves $2,400, which you can deduct in full the year you complete your second refi. If you paid points for the new loan, the process starts again; you can deduct the points over the term of the loan. 

    Home mortgage interest and points are reported on IRS Form 1098. You enter the combined amount on line 10 of Schedule A. If your 1098 form doesn’t indicate the points you paid, you should be able to confirm the amount by consulting your HUD-1 settement sheet. Then you record that amount on line 12 of Schedule A.


    Energy tax credits

    The energy tax credit of up to a lifetime $500 had expired in 2011. But the Feds extended it for 2012 and 2013. If you upgraded one of the following systems this year, it’s an opportunity for a dollar-for-dollar reduction in your tax liability: If you get the $500 credit, you pay $500 less in taxes.

    • Biomass stoves
    • Heating, ventilation, air conditioning
    • Insulation
    • Roofs (metal and asphalt)
    • Water heaters (non-solar)
    • Windows, doors, and skylights
    • Storm windows and doors

    Varying maximums

    Some of the eligible products and systems are capped even lower than $500. New windows are capped at $200 — and not per window, but overall. Read about the fine print in order to claim your energy tax credit.

    • Determine if the system is eligible. Go to Energy Star’s website for detailed descriptions of what’s covered. And talk to your vendor.
    • The product or system must have been installed, not just contracted for, in the tax year you'll be claiming it.
    • Save system receipts and manufacturer certifications. You’ll need them if the IRS asks for proof.
    • File IRS Form 5695 with the rest of your tax forms.

    Vacation home tax deductions

    The rules on tax deductions for vacation homes are complicated. Do yourself a favor and keep good records about how and when you use your vacation home.

    • If you’re the only one using your vacation home (you don’t rent it out for more than 14 days a year), you can deduct mortgage interest and real estate taxes on Schedule A.
    • Rent your vacation home out for more than 14 days and use it yourself fewer than 15 days (or 10% of total rental days, whichever is greater), and it’s treated like a rental property. Those expenses get deducted using Schedule E.
    • Rent your home for part of the year and use it yourself for more than 14 days and you have to keep track of income, expenses, and divide them proportionate to how often you used and how often you rented the house.

    Home buyer tax credit

    There were federal first-time home buyer tax credits in 2008, 2009, and 2010.

    • If you claimed the home buyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest.
    • If you used the tax credit in 2009 or 2010 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. Example: If you bought a home in 2010 and sold in 2012, you pay it back with your 2012 taxes.
    • That repayment rules are less rigorous for uniformed service members, Foreign Service workers, and intelligence community workers who get sent on extended duty at least 50 miles from their principal residence.

    Members of the armed forces who served overseas got an extra year to use the first-time home buyer tax credit. If you were abroad for at least 90 days between Jan. 1, 2009, and April 30, 2010, and you bought your home by April 30, 2011, and closed the deal by June 30, 2011, you can claim your first-time home buyer tax credit.

    The IRS has a tool you can use to help figure out what you owe.

    Property tax deduction

    You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.

    If you bought a house in 2012, check your HUD-1 Settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.

    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; tax laws may vary by jurisdiction.

  • After this hot summer: Fall Landscaping: How to Prepare Your Yard for Winter

    Posted Under: Design & Decor in San Bernardino County, How To... in San Bernardino County  |  October 5, 2012 9:44 AM  |  503 views  |  No comments

    Fall Landscaping: How to Prepare Your Yard for Winter

    By: Lisa Kaplan Gordon

    Fall landscaping preparations ready your yard for a long winter and glorious spring.

    Spread mulch

    “Fall mulching is better for the plants than spring mulching,” says Dan Taft, owner of The Cutting Edge in Chantilly, Va. “It helps protect roots from frost and helps retain moisture during a cold and dry winter.”

    Spread 2 to 3 inches of fresh mulch around shrubs and trees. Taft warns home owners to avoid using free mulch from municipal piles, which often contain disease spores; instead, buy hardwood shredded mulch from home and garden centers, he says.

    “Cheap, dump mulch mainly is made from trees that have died from disease,” Taft says. “Many diseases will linger in the mulch, like leaf spot and pine bark borers. You don’t want ground-up diseased plants around your landscaping.”

    Remove the dead and dying

    Fall isn’t the time to prune, because that encourages growth when healthy plants should remain dormant. But don’t shelve your shears and loppers yet. Fall is the time to neaten your landscaping before putting it to bed for the winter.

    “If you remove dead landscaping in fall, you don’t have to look at it all winter,” Taft says.

    • Remove dead annuals.
    • Deadhead spent blooms, and cut back dead and desiccated ornamental grasses and perennials.
    • Lightly prune dead and dying branches from shrubs and trees. Carefully remove dried blossoms from hydrangea, but don’t remove dead-looking stalks, where new buds will form in spring.
    • After the first frost, cut back tea roses to about a third of their height.

    Wrap delicate shrubs

    Heavy snow, ice, and high winds can dry and split your delicate and pricey shrubs. To protect your landscaping from the winter elements:

    • Hide small plants under overturned plastic pots or buckets.
    • Wrap shrubs, such as boxwoods, in burlap.
    • Surround vulnerable trees with shredded leaves.

    Take advantage of fall sales

    Early fall until the ground freezes is a good time to plant trees and shrubs. Not only do cooler weather and autumn rain put less stress on young landscaping plants, nurseries often have sales to empty their shelves before winter.

    “They need to sell every plant by Dec. 1,” Taft says. “Nurseries generally pay a third of the price that you’re paying. So don’t be afraid to offer less than the asking price. If you’re buying several things, the manager may give you a break.”

  • Window Seat Options for Storage Solutions

    Posted Under: Remodel & Renovate in Riverside County, Design & Decor in Riverside County  |  October 4, 2012 10:14 AM  |  503 views  |  No comments

    Window Seat Options for Storage Solutions

    By: Jan Soults Walker

    A window seat can add as much as 13 cubic feet of valuable storage space that doubles as attractive, usable seating for your home.

    Comfort and storage capacity go hand-in-hand when you add a window seat. The benefits of window seats are many: They de-clutter, provide comfy built-in seating, and add architectural appeal to any room.

    Types of window seats

    Window seats typically are one of three types. Each type can be made with a storage compartment accessible via drawers, doors, open shelves, or a lift-up seat. An average window seat takes up about 13 cubic feet and provides about that much in storage space.

    • Freestanding units are low-cost and portable but aren’t as finished-looking as built-ins. Cost: $200 to $500.
    • Custom-crafted window seats give you exactly the look and style you want and can be made to fit into odd-shaped spaces. They are also the priciest option. Cost: $400 to $1,000.
    • Modular window seats are built using stock kitchen cabinets from a home improvement center. This is a moderately priced option that the average DIYer can tackle. Select quality construction upper cabinets to achieve the proper height for your window seat base. Add a ¾-inch veneered plywood top, a cushion, and a toe-kick base; paint the unit to complete, if needed. Cost: $600 to $800.

    Where to add window seat storage

    Position versatile window seats in virtually any room. Some options include:

    • For entryway storage, use a window seat to stash boots, shoes, and seasonal or sports gear.
    • In playrooms, a kid-friendly seat is perfect for storing toys and games. Use safety hardware that prevents doors or lids from slamming on fingers or trapping kids inside. Outdoor fabrics work best in a kids’ space for stain-resistance and resilience. Also use quality, washable paints or polyurethane finishes over stains.
    • In a bathroom, cover window seats with outdoor fabrics and moisture-resistant paint. If possible, install the seat so a heating duct vents through the seat base--towels stored inside will be toasty.
    • Niches naturally lend themselves to retrofitting with window seats. Existing niches can be found in a bay window or alcove. Or, your could create a niche by flanking your window using cabinets or bookcases. If you choose to forget the niche, a seat can be successfully positioned on a flat wall.

    Window seat installation tips

    • Don’t let a floor or wall vent keep you from installing a window seat; simply redirect the vent toward the window seat’s toe-kick, and provide an opening for heated or cooled air to flow into your room.
    • Your windows will determine the length of your seat; the height (including the seat cushion) should be 18 to 20 inches, and the depth a comfortable 20 to 24 inches to allow for cushions along the back.
    • Building codes require fitting windows near a window seat with tempered glass.
  • How to Mulch Leaves: Cheap Mulch for Your Landscaping

    Posted Under: Quality of Life in Riverside County, Going Green in Riverside County  |  September 16, 2012 11:05 AM  |  510 views  |  No comments

    How to Mulch Leaves: Cheap Mulch for Your Landscaping

    By: Lisa Kaplan Gordon

    Don’t toss out those fallen leaves you’ve spent weekends raking and blowing. Autumn leaves make low-cost mulch and fertilizer to protect and feed your landscaping all winter.

    Now that your trees are bare, make the most of those fallen leaves. Here are a few ways to recycle leaves to protect and feed your landscaping all winter.

    Mulch

    Mulching plants and shrubs is not just a spring chore. Your landscaping needs winter protection, too.

    Autumn leaves are a low-cost mulch that insulate roots from frigid temperatures and hold moisture in the ground, which is vital to plant health in winter.

    After you’ve removed dead blooms or rotting vegetables, rake or blow leaves into garden beds, and mound them around the base of shrubs and trees. To quicken decomposition and feed plants all winter, run leaves through a shredder or run over them with a mower.

    Composting leaves

    Rotting leaves and pine needles make great compost. Just throw them onto your compost pile, and douse them with water before you drain your outdoor spigot for the winter.

    Or, bag up the leaves and throw them into a corner of your yard. If you have a mild winter, dark plastic will catch the rays and cook the leaves, speeding up decomposition. Come spring, dump the rotting leaves on your compost pile, and save the bags for next fall’s cleanup.

    Leaves as fertilizer

    Instead of raking or blowing leaves, run your mower over them a couple of times, and let them decompose and nourish your lawn.

    What do you think of using leaves as mulch?

  • Time to Gear Up Your Fall Veggie Garden

    Posted Under: Quality of Life in San Bernardino County, Going Green in San Bernardino County  |  September 16, 2012 11:03 AM  |  498 views  |  No comments
    Time to Gear Up Your Fall Veggie Garden

    By: Lisa Kaplan Gordon

    Fall is a great time to grow veggies that thrive in cooler weather, like broccoli, turnips, and radishes. Here’s how to get your fall vegetable garden growing.

    Fix the soil

    Before planting a second crop, turn and loosen soil to about 6 inches down, and remove all weeds. 

    If you’ve fertilized your garden all along, your soil is ready for a fall crop. If not, add a generous helping of compost from your pile, or sprinkle roughly 1 to 2 pounds of all-purpose fertilizer for each 100 sq. ft. of growing space (check label for exact amount).

    Choose seeds over seedlings

    In late summer, it’s better to sow seeds rather than plant seedlings. Seeds will take a week or two to germinate and are less likely to bake in the sun. However, you must keep them moist, so plan to water daily until they sprout.

    If you’re planting after Labor Day, you can take a chance on seedlings, although most nurseries gear down in fall and have a limited supply of cold-crop seedlings.

    Time and temperature

    To time your fall garden:

    1. Understand how many days it takes for seeds to mature (“days to harvest” on the seed packet).

    2. Then find the average date of your area’s first frost. The Farmer’s Almanac’s Average Frost Date Map shows you when to expect your first fall frost.

    3. Subtract the harvest days from the frost date and you’ll know the last time you can plant to expect a reasonable harvest. For example: Turnips need 55 days to harvest, and Charlottesville, Va.’s, first fall frost is around Oct. 31. So the last safe time to plant will be Sept. 7, give or take a week.

    Take your plant’s temperature

    Of course, not all plants die with the first frost. Some can even live under snow. So, mix tender and hardy vegetable varieties in your fall garden to ensure produce until spring.

    Tender veggies that die in a light frost include:

    • Cucumbers
    • Eggplant
    • Kale
    • Lettuce
    • Peppers
    • Tomatoes

    Semi-hardy vegetables can live through several hard frosts and include:

    • Beets
    • Collards
    • Green onions
    • Potatoes
    • Radishes
    • Spinach

    Hardy vegetables can live until temperatures drop below 20 degrees F and include:

    • Broccoli
    • Brussels sprouts
    • Cabbage
    • Carrots
    • Cauliflower
    • Turnips

    Ways to protect your veggies

    You can goose Mother Nature’s growing season by covering or shielding fall vegetables when temperatures begin to drop.

    • Cover individual plants with plastic water or pop bottles with the spouts removed. Be prepared to remove them during a hot spell or your plants will cook.
    • Make a cold frame — a slanted wood box covered with glass or plastic — that will protect fall plants from wind and cold.
    • Cover young plants with 1 or 2 inches of organic garden mulch to shield roots and protect slender stems.

    Bonus: Organic mulch will degrade during the fall and winter and add soil nutrients that will give your spring garden a good start.

  • 10 Clever Uses for Hydrogen Peroxide

    Posted Under: Quality of Life in San Bernardino County, Home Selling in San Bernardino County, Going Green in San Bernardino County  |  September 4, 2012 8:45 PM  |  547 views  |  No comments

    10 Clever Uses for Hydrogen Peroxide

    By: Courtney Craig


    Is hydrogen peroxide a non-toxic weapon in your green cleaning arsenal? It should be!


    In your kitchen


    1. Clean your cutting board and countertop. Hydrogen peroxide bubbles away any nasties left after preparing meat or fish for dinner. Add hydrogen peroxide to an opaque spray bottle — exposure to light kills its effectiveness — and spray on your surfaces. Let everything bubble for a few minutes, then scrub and rinse clean.

    2. Wipe out your refrigerator and dishwasher. Because it’s non-toxic, hydrogen peroxide is great for cleaning places that store food and dishes. Just spray the appliance outside and in, let the solution sit for a few minutes, then wipe clean.

    3. Clean your sponges. Soak them for 10 minutes in a 50/50 mixture of hydrogen peroxide and warm water in a shallow dish. Rinse the sponges thoroughly afterward.

    4. Remove baked-on crud from pots and pans. Combine hydrogen peroxide with enough baking soda to make a paste, then rub onto the dirty pan and let it sit for a while. Come back later with a scrubby sponge and some warm water, and the baked-on stains will lift right off.

    In your bathroom

    5. Whiten bathtub grout. If excess moisture has left your tub grout dingy, first dry the tub thoroughly, then spray it liberally with hydrogen peroxide. Let it sit — it may bubble slightly — for a little while, then come back and scrub the grout with an old toothbrush. You may have to repeat the process a few times, depending on how much mildew you have, but eventually your grout will be white again.

    6. Clean the toilet bowl. Pour half a cup of hydrogen peroxide into the toilet bowl, let stand for 20 minutes, then scrub clean.

    In your laundry room

    7. Remove stains from clothing, curtains, and tablecloths. Hydrogen peroxide can be used as a pre-treater for stains — just soak the stain for a little while in 3% hydrogen peroxide before tossing into the laundry. You can also add a cup of peroxide to a regular load of whites to boost brightness. It’s a green alternative to bleach, and works just as well.

    Anywhere in your house

    8. Brighten dingy floors. Combine half a cup of hydrogen peroxide with one gallon of hot water, then go to town on your flooring. Because it’s so mild, it’s safe for any floor type, and there’s no need to rinse.

    9. Clean kids’ toys and play areas. Hydrogen peroxide is a safe cleaner to use around kids, or anyone with respiratory problems, because it’s not a lung irritant. Fill an opaque spray bottle with hydrogen peroxide and spray toys, toy boxes, doorknobs, and anything else your kids touch on a regular basis. You could also soak a rag in peroxide to make a wipe.

    Outside

    10. Help out your plants. To ward off fungus, add a little hydrogen peroxide to your spray bottle the next time you’re spritzing plants. Use this helpful chart to determine the ratio of hydrogen peroxide to water for your types of plants.
  • Fannie Mae & Freddie Mac Streamline the Short Sale Process

    Posted Under: Home Selling in Riverside County, Financing in Riverside County, Foreclosure in Riverside County  |  August 23, 2012 9:18 AM  |  576 views  |  No comments

    Both Fannie Ma  (https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/svc1219.pdf) and Freddie Mac (http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1216.pdf)

    have streamlined their short sale processes. See above link for detailed information.

    These new servicing guidelines will permit a homeowner to sell their home in a short sale even if they are current on their mortgage with an eligible hardship.

    Fannie Mae and Freddie Mac will waive the right to pursue deficiency

    judgments in exchange for a financial contribution when a borrower has

    sufficient income or assets to make cash contributions or sign promissory

    notes.

    It will offer special treatment for military personnel with Permanent Change of

    Station (PCS) orders.

    It will provide servicers and borrowers clarity on processing a short sale when a

    foreclosure sale is pending.

    Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders

    to expedite a short sale.

     

    If you have a short sale question or need, please call us at 951.231.8439. We are fully qualified to help, are HAFA Certified and will treat you with complete understanding and dignity in your time of financial need.

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