Top 10 Homebuying and Selling Tips for Fall ~ Tip # 1
Whether you're hunting for a bargain or trying to close a deal before the holidays, take advantage of the season with these tips. Check back each day for the rest of the ideas!
#1: FALL SELLERS: Play Up the Season
Pleasant weather and richly hued foliage make fall one of the most beautiful times of the year. If you're selling a home, take advantage of it! As your summer plants start to fade, replace them with vibrant mums or other fall-blooming flowers. Tasteful autumn decorations -- like pumpkins, tri-colored corn or a wreath on the door -- can also enhance your home's curb appeal. But don't think the beauty of fall lets you off the hook when it comes to lawn maintenance. Be sure to keep falling leaves at bay with frequent raking, and patch up any brown spots in the grass.
Without breaking the bank, get a few fall-colored decorations for inside your house as well, like inexpensive window treatments or seasonal dinnerware. Fresh decor will make your space seem current and well maintained.
By Shannon Petrie, FrontDoor.com | Published: 8/20/2010
Thursday, September 16, 2010
Tuesday, September 14, 2010
Year End Tax Planning ~ Special Concerns for 2010
Year-End Tax Planning--Special Concerns for 2010
Year-end tax planning is as much about 2011 as it is about 2010. Often, there's a real opportunity for year-end tax savings when you can predict that you'll be paying taxes at a lower rate in one year than in the other. For example, under the right circumstances, deferring a year-end bonus or potentially accelerating deductions into the current year can pay off in a big way. Of course, to effectively plan, it helps to have a good idea of what next year's tax rates will be. Unfortunately, as 2010 draws to a close, 2011 brings some uncertainty in that regard.
Will there be higher tax rates in 2011?
Currently, there are six marginal federal income tax brackets: 10%, 15%, 25%, 28%, 33%, and 35%. These brackets--the result of 2001 tax legislation--expire at the end of 2010. As things stand now, in 2011 the 10% bracket disappears, and the remaining brackets return to their pre-2001 levels: 15%, 28%, 31%, 36%, and 39.6%. Though it would take action by Congress, the president has indicated that he would like to permanently extend the 2010 rates for individuals earning less than $200,000 and married couples earning less than $250,000 (these dollar benchmarks would be reduced by an amount that reflected the standard deduction and exemption amounts), but allow the two highest brackets to return to 36% and 39.6% for higher earners.
What about long-term capital gains?
Currently, long-term capital gain is generally taxed at a maximum rate of 15%. If you're in the 10% or 15% marginal income tax bracket in 2010, though, a special 0% rate applies (in other words, you owe no tax on any long-term capital gain). The same rates apply to qualified dividends received in 2010.
These rates also expire at the end of the year. The maximum rate on long-term capital gain in 2011 will generally increase to 20%, with a 10% rate applying to individuals in the lowest tax bracket (special rules would apply to qualifying property held for five years or more). Qualifying dividends will be taxed as ordinary income. The president has proposed to permanently extend the 0% and 15% rates, with a new 20% rate applying to high-income individuals (those in the 36% and 39.6% tax brackets). Again, though, that all depends on what Congress does in the next few months.
Other considerations
* 2010 Roth IRA conversions: A special rule applies to Roth IRA conversions in 2010 that allows you to postpone paying federal income tax on the income that results from the conversion. Instead of including the taxable income that results from the conversion on your 2010 federal income tax return (still an option if you so choose), you can report half the income on your 2011 return and half on your 2012 return. Whether a Roth conversion makes sense for you depends on your individual circumstances, including your marginal income tax rate in 2011 and 2012.
* Alternative minimum tax (AMT): In a now-familiar pattern, legislation that temporarily increased AMT exemption amounts, forestalling a dramatic increase in the number of individuals ensnared by the tax expired at the end of 2009. Congress is likely to act, but the specifics are uncertain.
* Required minimum distributions (RMDs): The requirement to take minimum distributions from IRAs and defined contribution plans was temporarily suspended for 2009; minimum distribution requirements are once again in effect for 2010.
* Pending legislation: Legislation is pending to extend some popular provisions that had expired, including the ability to deduct state and local sales tax in lieu of income tax on Schedule A, the additional standard deduction for state and local real property tax, and the above-the-line deduction for qualified tuition and related expenses. And additional legislation is likely, too, so stay up-to-date.
Provided courtesy of Taylor Financial
Year-end tax planning is as much about 2011 as it is about 2010. Often, there's a real opportunity for year-end tax savings when you can predict that you'll be paying taxes at a lower rate in one year than in the other. For example, under the right circumstances, deferring a year-end bonus or potentially accelerating deductions into the current year can pay off in a big way. Of course, to effectively plan, it helps to have a good idea of what next year's tax rates will be. Unfortunately, as 2010 draws to a close, 2011 brings some uncertainty in that regard.
Will there be higher tax rates in 2011?
Currently, there are six marginal federal income tax brackets: 10%, 15%, 25%, 28%, 33%, and 35%. These brackets--the result of 2001 tax legislation--expire at the end of 2010. As things stand now, in 2011 the 10% bracket disappears, and the remaining brackets return to their pre-2001 levels: 15%, 28%, 31%, 36%, and 39.6%. Though it would take action by Congress, the president has indicated that he would like to permanently extend the 2010 rates for individuals earning less than $200,000 and married couples earning less than $250,000 (these dollar benchmarks would be reduced by an amount that reflected the standard deduction and exemption amounts), but allow the two highest brackets to return to 36% and 39.6% for higher earners.
What about long-term capital gains?
Currently, long-term capital gain is generally taxed at a maximum rate of 15%. If you're in the 10% or 15% marginal income tax bracket in 2010, though, a special 0% rate applies (in other words, you owe no tax on any long-term capital gain). The same rates apply to qualified dividends received in 2010.
These rates also expire at the end of the year. The maximum rate on long-term capital gain in 2011 will generally increase to 20%, with a 10% rate applying to individuals in the lowest tax bracket (special rules would apply to qualifying property held for five years or more). Qualifying dividends will be taxed as ordinary income. The president has proposed to permanently extend the 0% and 15% rates, with a new 20% rate applying to high-income individuals (those in the 36% and 39.6% tax brackets). Again, though, that all depends on what Congress does in the next few months.
Other considerations
* 2010 Roth IRA conversions: A special rule applies to Roth IRA conversions in 2010 that allows you to postpone paying federal income tax on the income that results from the conversion. Instead of including the taxable income that results from the conversion on your 2010 federal income tax return (still an option if you so choose), you can report half the income on your 2011 return and half on your 2012 return. Whether a Roth conversion makes sense for you depends on your individual circumstances, including your marginal income tax rate in 2011 and 2012.
* Alternative minimum tax (AMT): In a now-familiar pattern, legislation that temporarily increased AMT exemption amounts, forestalling a dramatic increase in the number of individuals ensnared by the tax expired at the end of 2009. Congress is likely to act, but the specifics are uncertain.
* Required minimum distributions (RMDs): The requirement to take minimum distributions from IRAs and defined contribution plans was temporarily suspended for 2009; minimum distribution requirements are once again in effect for 2010.
* Pending legislation: Legislation is pending to extend some popular provisions that had expired, including the ability to deduct state and local sales tax in lieu of income tax on Schedule A, the additional standard deduction for state and local real property tax, and the above-the-line deduction for qualified tuition and related expenses. And additional legislation is likely, too, so stay up-to-date.
Provided courtesy of Taylor Financial
Saturday, September 4, 2010
Why We Need the Mortgage Interest Deduction
Why the MID Deserves to Stay
Limiting the mortgage interest deduction would hurt middle-income earners.
By Lawrence Yun | September 2010
We’ve heard increased chatter among opinion makers about the need to eliminate or trim the mortgage interest deduction. The argument goes something like this: Not only would ending the MID create a deep source of money for reducing the U.S. budget deficit, but in the aftermath of the mortgage crisis, the country needs to rethink its favored tax treatment of homeownership.
However, this argument downplays two critical facts. First, home owners already pay 80 to 90 percent of the income tax in our country, and among those who claim the MID, almost two-thirds are middle-income earners.
So, when we talk about the beneficiaries of this tax benefit, we’re talking about households who are the pillars of federal income tax revenue.
We would now be asking them to shoulder an additional tax burden, and also to brace for a 15 percent drop in home values—that’s how much we can expect values to fall as buyers discount the value of the deduction in their purchase offers.
Second, critics who link the mortgage meltdown to our country’s support for homeownership are ignoring the origins of the crisis: unprecedented laxity in underwriting and faulty ratings by credit rating agencies of the securities backed by those mortgages. Through the terms of 17 presidencies, the MID has brought remarkable stability to the housing market.
Yet, critics fail to recognize why our country has been so supportive of homeownership. Academic studies have demonstrated positive social benefits, including lower juvenile delinquency rates and higher student achievement among children of home owners.
Whatever deficit reduction might be realized by taking a carving knife to the MID would come at an intolerably steep price: trillions of dollars in wealth destruction and a new uncertainty in what has long been recognized as a bedrock of our economy.
Limiting the mortgage interest deduction would hurt middle-income earners.
By Lawrence Yun | September 2010
We’ve heard increased chatter among opinion makers about the need to eliminate or trim the mortgage interest deduction. The argument goes something like this: Not only would ending the MID create a deep source of money for reducing the U.S. budget deficit, but in the aftermath of the mortgage crisis, the country needs to rethink its favored tax treatment of homeownership.
However, this argument downplays two critical facts. First, home owners already pay 80 to 90 percent of the income tax in our country, and among those who claim the MID, almost two-thirds are middle-income earners.
So, when we talk about the beneficiaries of this tax benefit, we’re talking about households who are the pillars of federal income tax revenue.
We would now be asking them to shoulder an additional tax burden, and also to brace for a 15 percent drop in home values—that’s how much we can expect values to fall as buyers discount the value of the deduction in their purchase offers.
Second, critics who link the mortgage meltdown to our country’s support for homeownership are ignoring the origins of the crisis: unprecedented laxity in underwriting and faulty ratings by credit rating agencies of the securities backed by those mortgages. Through the terms of 17 presidencies, the MID has brought remarkable stability to the housing market.
Yet, critics fail to recognize why our country has been so supportive of homeownership. Academic studies have demonstrated positive social benefits, including lower juvenile delinquency rates and higher student achievement among children of home owners.
Whatever deficit reduction might be realized by taking a carving knife to the MID would come at an intolerably steep price: trillions of dollars in wealth destruction and a new uncertainty in what has long been recognized as a bedrock of our economy.
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