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Saturday, March 7, 2015

9 EASY MISTAKES HOMEOWNERS MAKE ON THEIR TAXES


Attention Home Owners

As you calculate your tax returns, be careful not to commit any of these home related tax mistakes, which tax pros say are especially common and can cost you money or draw the IRS to your doorstep.

 

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 that tax year, no matter what the date is on your tax bill. Dave Hampton, CPA, a tax department manager at the Cincinnati accounting firm of Burke & Schindler, has seen homeowners confuse payments for different years and claim the incorrect amount.


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. 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 or the amount of property taxes noted on the Form 1098 that your lender sends. If you don’t receive Form 1098, contact the agency that collects property tax to find out how much you paid.

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, you must deduct points over the life of your new loan. For example, if you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $2,000 divided by 15 years, or $133 per year.


4. Misjudging the home office tax deduction 
The deduction is 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. But there’s good news. There’s a new simplified home office deduction option if you don’t want to claim actual costs. If you’re eligible, you can deduct $5 per square foot up to 300 feet of office space, or up to $1,500 per year.

5. Failing to repay the first-time homebuyer tax credit 

 If you used the original homebuyer tax credit in 2008, you must repay 1/15th of the credit over 15 years. If you used the tax credit in 2009 or 2010 and then within 36 months you sold your house or stopped using it as your primary residence, you also have to pay back the credit. The IRS has a tool you can use to help figure out what you owe.

6. Failing to track home-related expenses If the IRS comes a-knockin’, don’t be scrambling to compile your records. File or scan and store home office and home improvement expense receipts and other home-related documents as you go.


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 typically exclude $250,000 of any profits from taxes (or $500,000 if you’re married filing jointly). So if your cost basis for your home is $100,000 (what you paid for it plus any improvements) and you 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. And high-income earners could get hit with an additional tax.


8. Filing incorrectly for energy tax credits

 If you made any eligible improvements in 2014, such as installing energy-efficient windows and doors, you may be able to take a 10% tax credit (up to $500; with some systems your cap is even lower than $500). But keep in mind, it's a lifetime credit. If you claimed the credit in any recent years, you're done. Installing a solar electric, solar water heater, geothermal, or small wind energy system can also make you eligible to take the Residential Energy Efficient Property Credit. To claim the deduction, you have to use the complicated Form 5695, which can mean cross-checking with half a dozen other IRS forms. Read the instructions carefully.

9. Claiming too much for the mortgage interest tax deduction  

Taxpayers are allowed to deduct mortgage interest on home acquisition debt up to $1 million, plus they can also deduct up to $100,000 in home equity debt.  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. 



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.


Saturday, January 24, 2015

SOUTH BAY 2015 STATE OF THE NEIGHBORHOOD

Happy New Year! 


After "zipping" into 2015, I listened to the President give the “State of the Nation” address and was thinking…what’s the state of my neighborhood? Have you thought about what actually happened in your little world last year and what you’ll be doing about it in 2015? Personally my little world is limited to the South Bay. It’s hard to process all the facts and figures of what’s happening across the nation when my family is more concerned with missing the chicken breast sale at Albertsons this week, but I digress…Here are a few thoughts to ponder…

The Satellite/Cable bills keep getting larger even though the level of service continues to decline. Since we need them just to watch regular TV stations, they think they have us cornered. 2015 is going to begin a new era for us and for them in terms of digital programming. We’ll see who laughs last.

 According to the well-sourced rumors, Los Angeles may be getting its own football team (or maybe two) soon but it's still totally uncertain where that team would play. There are three potential stadium sites—in Downtown, Inglewood and the City of Industry. Then there's a fourth in Carson. Two unnamed teams have shown interest in a 172-acre property near the 405/110 interchange that today hosts Victoria Park and a golf course. The site is owned by LA County and sits on a former landfill. I wonder if they will have to pipe in an evacuation system like we have in Rolling Hills Estates and Torrance for people living on that landfill in Country Hills and in those condos off Rolling Hills Road. Hmmm!

2014 was definitely the year for Neighborhood Watch roll outs and the beginning of people getting involved in onsite venues like “Nextdoor” to catch up on neighborhood news. Of course they also got to snitch (water wasters) and bicker (parking issues) and sell their wares (anyone interested in two very cute baby goats?) Eventually we’ll figure out how to serve the original purpose which was to help us keep our neighborhoods safe and sane. Looking forward …

Interest rates are in the 3’s so if you’re interested in refinancing, now would be a great time. First time buyers should be jumping up and down. remember when rates were double digit? Take advantage before the government decides to do something about its multi trillion dollar deficit.


Blessings for a safe, healthy, happy
and prosperous 2015!




Charlie Hoffmann
TeamSouthBayRealty
Broker/OwnerBRE Lic # 0769985
310-378-4440

CharliesNeighborhood.com

Thursday, November 20, 2014

THANKSGIVING IS FOR EVERY DAY

Pine Cone Baskets for some friends
Thanksgiving … a time to be grateful, a time for family, a time for celebration.  But, what if you didn’t have a family or a turkey or a place to call home?  Could you still be thankful?  Thanksgiving reminds me of a story I once heard about a young man trying to get home for his family Thanksgiving Dinner.  He lived in New York and was taking the subway.  Everything got in his way that day and he was late and getting more and more frustrated. Now the subway train seemed to be stalled, just one more problem.  He wondered why the universe was trying to ruin his Thanksgiving.  It was looking more and more like he wouldn’t make it to his family home in time for dinner.  On top of that, there were four young kids running wildly around in the subway car, screaming and pushing and irritating everyone.  The man they appeared to be with, probably their Dad, was just sitting there.  He didn’t say a word to them as they carried on .  Finally the frustrated traveler had enough and approached the male chaperone of this wild bunch.  “Excuse me sir,” he said, “can’t you do anything about these kids?  They are irritating everyone.”  The man just shrugged and shook his head.  “I don’t know what to do” he said, “we just buried their Mom.  We’re heading back now from the services and they haven’t eaten and they’re upset.  Mom had promised a big turkey for Thanksgiving but her health didn’t hold out. Now I’m not sure what we’re going to do.”  The young man held back a tear.  “Hold on,” he said, “let me make a call.”  He called his folks and told them about this family.  He came from a very big family himself and they always had plenty of food.  He knew they would have enough for this man and his kids.  The young man’s Mom said “Please bring them home.”   He escorted the family to his folk’s home where everyone welcomed them.  The man was so grateful for his help.  The kids told stories about their Mom and the families remained friends long after the holidays.  Sometimes we need only look outside our busy little worlds to appreciate the reasons we all have to be thankful all the time, not just at Thanksgiving but for every day.        
My Honey For Whom I Am Most Grateful ;)
            
Turkey Soup for the Soul

Puppy Playdate
Friends Forever
My Baby






Charlie, Rod and the whole Russell household  wish you all a very Happy Thanksgiving and a Merry Christmas ... May your 2015 far exceed your 2014 in joy, happiness, love and big wet sloppy kisses from fur and non-fur admirers.  God Bless!      







Team South Bay Realty
24022 Vista Montana - Suite A
Torrance, CA 90505
310-378-4440 
BRE# 00769985

Saturday, September 13, 2014

Lessons from Tornado Alley


The MAN CAVE
The last few weeks have been too hot for my taste.  Growing up in Chicago, I hated the hot, muggy summer months.  That’s the reason I live in California now and not Illinois.  During those months, there was almost always an impending tornado just waiting to swoop down on us.  We actually had a storm cellar and were all schooled on how to use it.  As soon as the sky blackened overhead (which was usually right in the middle of a backyard picnic) we headed down the stairs into the basement.  Yes, everyone had a basement in Chicago.  We would pool our refreshments into the cellar area and wait it out.  The cellar was different from the basement.  It was in the far southeast corner of the building supported by the foundation on two sides with heavy wooden doors that closed tight.  It was rank and musty and probably more dangerous than the tornado if you had asthma.  It did serve its purpose though.  One summer, we lost an entire block of houses just one block east of us.  Lake Michigan was east of our town (a little southwest suburb called Berwyn) and the storms would pool from over the lake and head out our way.  We’d hunker down in that cellar with a single light bulb hanging from a bare wire in the ceiling and wait it out.  They don’t build cellars out here in California but they do have something similar – in our house it’s called a “Man Cave.”   It’s the place my hubby heads out to hunker down when we have a tornado brewing.  Of course that’s usually just me having a hissy over something, not involving any atmospheric pressure or turbulence.  The cellar and the man cave serve the same purpose though.  Keeps everyone safe and cool and usually provides solace in a place that generally includes beverages of choice for the duration.  Muggy, hot weather in California also brings earthquakes, or so it seems.  I just refilled my emergency kit with all the necessities in case we have the big one.  Being a 
http://www.redondo.org/depts/fire/cert_academy.asp
CERT Training in Redondo Beach
Certified Emergency Response Team member, I’m always worried about these things.  So, my sage advice this month is to stock your cellar (or man cave/storage shed) with emergency supplies just in case we have an “event.”  My husband likes to help me with the emergency supplies.  I just don’t know how Jack Daniels became “medically necessary” for the first aid kit but maybe I missed that in my CERT training.  Anyway, remember – if you live in “shake and bake” country or even in “tornado alley” you need to be ready for a big event.  Don’t chance it – you can always use the water supplies and eat the canned goods later as you rotate your stock.   Nothing goes to waste – especially the Jack Daniels …it’s a Man Cave
 
Thing!  You might want to check out CERT training in your area too.  It doesn't hurt to know how to function under pressure in an emergency and to protect your loved ones and fur people as well. 

Saturday, May 10, 2014

Mother's Day Dos and Don'ts

First of all, I’m not a Mother – at least not to tiny humans.  If fur people count, Motherhood has been my blessing for sure.  Of course we all “mother” to some extent (whether male or female) but Mother as a noun and not a verb is what we reflect upon this time of year. 

People ask me all the time “do you have any kids?”   Bad Question – I always answer “Not that I know of.”  That answer always brings a wrinkly forehead to the questioner.  Of course there were those somewhat unremembered days in the 60’s, but I digress.  It’s not polite to ask that question.  People usually ask because they want to tell you about their kids, grandkids, great grandkids.  I actually inherited a few grandkids when I married my husband but that doesn’t really count.  Motherhood and/or Grandmotherhood  is more in the “being” than the “doing.” 


My role model for a Mother is my wonderful friend Annie.  She’s my morning walk buddy.  For the last six or seven years (I’ve lost count) we walk every single morning.  We start out at 6:00 a.m. and walk my dogs (she doesn’t have any.)  We discuss politics, crime, relatives, dog poop…we sing songs, reminisce about earlier times and laugh a lot.  We’re probably a tad loud because neighbors have asked me “what in heaven’s name could possibly be so funny to cackle about at Odark30?”  The answer, I guess, is life.  Annie has 7 children that she knows of…and many grandchildren and great grandchildren (I’ve kind of lost track, they just keep coming.)  She’s outlived two husbands that she dearly loved and Annie loves her kids, all of them.  Some make her crazy from time to time but it doesn’t matter, she’s THE MOM.  I listen but I don’t presume or comment.  I learned a long time ago you don’t ever advise a MOM on how to raise or handle her kids, no matter what “pearl of wisdom” you think you must provide.  In turn, Annie doesn’t tell me how to handle my dogs or cats or husband either.  It’s all good!  I listen to the wonderful stories about Annie’s kids and I remember my own childhood.  I marvel at how Moms survive all the drama, disappointment and stress.  I guess it’s the laughter and love and tears of joy that sustain. 


This Mother’s Day, tell the Moms you know how much you admire them.  Don’t ask females you’ve just met if they have any kids (they’ll tell you in good time if they do.)  Kiss your Mom if she’s still with you and remember what a snotty little brat you were and how much she had to …I’ve digressed again.  Let her know how much you love her.   Posies and chocolates are nice but don’t “hold a candle” to some honest affection and admiration and please don’t leave out the hugs. 


Happy Mother’s Day to everyone, tiny human and fur people Moms alike!  We love you all.  

Monday, April 14, 2014

How To Screw Up Your Retirement

Just read this article by Dennis Miller "Miller's Money Forever"

There are many creative ways to screw up your retirement.          Let me show you how it’s done:

  • Supporting adult children
  • Ignoring your health
  • Not keeping your retirement plan up to date
  • Thinking you can continue working as long as you wish
  • Not increasing your rate of saving
  • Continually taking equity out of your home
  • Retiring with a substantial mortgage
  • Taking out a reverse mortgage at a young age
  • Putting your life’s savings into an annuity
  • Thinking your employer’s retirement plan is all you need.
While I agree with the foregoing, I think he may have missed a few really bad ideas I've noticed lately.  Once you have the time on your hands and a perfectly good retirement
  ahead to screw up, I'd avoid these...
  • Continuing to shop at Amazon daily after your paycheck has been discontinued
  • Deciding to buy that new SMART CAR to save money before they actually perfect it
  • Trying to do your own roofing work with your spouse holding the ladder
  • Buying a boat to relax instead of taking a cruise
  • Moving into the "Rental Unit"  in the back while the kids take over your house
  • Planting a Creative Rock Garden in front of your house to save money on water
  • Taking up Snowboarding after age 65 to spend time with the grandkids
  • Putting a big chunk of your savings into your kid's new MLM business
  • Starting that new Franchise Business you've read so much about 
  • Lending money to relatives as an investment that pays more interest than the banks
Ah well, sometimes these things are more easily done than avoided.  Just don't say I didn't warn you.  

Hope you all have a great April and enjoy your Holidays.  We'll be back to warn you about Mother's Day Dos and Don'ts next month.  

Your Neighborhood Real Estate Store
24022 Vista Montana
Torrance, CA 90505
310-378-4440




Monday, March 17, 2014

Crime and Punishment

Charlies Neighborhood News  (click on this link if you don't get my newsletter delivered)

Every Month, I send out an "E" Newsletter and a printed version.  Some people like one and some like the other.  Personally, I receive so much email, most of which I really don't have any interest in reading, I hate to clutter other peoples mailboxes with mine.  As far as the printed version, I have a lot of fans of my monthly newsletter.  It's simpler than the "E" version and more folksy.  I try to include some fun stuff ... favorite recipes, "how to" tips, neighborly news.  Since I've been at this for decades, people actually call me when they don't get my newsletter.  I love that - makes me feel like someone is actually reading it.  Every now and then I get an email thanking me for information.  I love that even more.  Makes my monthly effort feel worthwhile.

For some time now I've also been getting NIXLE alerts.  In the beginning they weren't in "my neighborhood" so I didn't feel too worried.  Lately they are edging ever nearer.  I just read one about a pair of Male and Female Distracters.  It appears they knocked on the front door of the person's home.  He opened the door and the "perp" (I learned that word watching CSI) inquired if a certain party resided there.  When told no, the perp apologized and walked away.   The unsuspecting homeowner went out to his backyard and observed perp #2 on his cellphone and asked if he could help him.  Perp #2 said he was looking for his son's ball and began rambling on eventually fleeing the backyard through a side gate.

The homeowner then discovered that perp #2 had moved a bench in the backyard, climbed up a water pipe to the second story, pried open the glass door and ransacked his bedroom.  There was a plastic bag containing BBQ chicken remnants in the backyard (probably used to quiet the homeowners dog.)

Now I'm wondering, do you think it would be helpful to let you know about the Lighter Low Calorie Chicken Pot Pie this month or to find a mug shot of these perps to help you guard your house?
 It's really comes down to this.  Since none of us have much time to read anymore, we have to make it count.  Maybe that's why we don't have any "Good News" papers.   And to think I was going to report on the recent occurrence of Coyotes menacing our small animals this month.  I wonder if BBQ chicken remnants would appease them...


As our Police Department Keeps Reminding us ...

"See Something - Say Something"  






Charlie Hoffmann
Team South Bay Realty
310-378-4440