Disclaimer: I’m not a tax expert or professional, so please double check this with your tax preparer.  The main thing is to make sure you don’t rouse the IRS or pay more taxes than necessary —you should know the score on each home tax deduction and credit. -Ray Brown

Sin #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 2011 property taxes until 2012. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in 2011, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #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, says Bob Meighan, CPA and vice president at TurboTax in San Diego. 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. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #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, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Failing to deduct private mortgage insurance

Lenders require home buyers with a down payment of less than 20% to purchase private mortgage insurance (PMI). Avoid the common mistake of forgetting to deduct your PMI payments. However, note the deduction begins to phase out once your adjusted gross income reaches $100,000 and disappears entirely when your AGI surpasses $109,000. Also, unless Congress acts to extend the PMI deduction again, 2011 is the last tax year for which you can take this deduction.

Sin #5: Misjudging the home office tax deduction

This deduction may not be as good as it seems. It’s 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. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here’s what to  know about what you can write off.

Sin #6: Missing the first-time home buyer tax credit

While the original home buyer tax credit deadline passed in April 2010 (and isn’t available in 2012), military families and some government workers on assignment outside the U.S. were given an extension until April 30, 2011, to get a home under contract and take advantage of up to $8,000 in tax credits for first-time buyers and $6,500 in credits for repeat buyers.

It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

Sin #7: Failing to track home-related expenses

If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits, insurance company statements for PMI, and lender or government statements to confirm property taxes paid.

Sin #8: 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. However, you can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if you bought a home for $100,000 and 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.

Sin #9: Filing incorrectly for energy tax credits

If you made any eligible improvement, fill out Form 5695. Part I, which covers the 30%/$1,500 credit for such items as insulation and windows, is fairly straightforward. But Part II, which covers the 30%/no-limit items such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

Sin #10: Claiming too much for the mortgage interest tax deduction

You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article provides general information about tax laws and consequences, but shouldn’t be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

—Ray Brown, BA, ABR, CDPE

If you’d like to see if you can do what this couple did, just contact me and I will help you find the property that makes a good investment for you.

Some folks think the paint on their home is for appearance only, yet the real purpose of painting your house or staining your deck is protection of the wood/material used for your siding or deck.

Your deck and the exterior of your home is going to be covered by snow all winter and the house can always be repainted in the spring. But taking care of these jobs now has benefits beyond just crossing them off of your to-do list.  Now, you can either do this yourself or hire a professional.  I always hire a professional because 1) I stink at painting, and 2) I want to make sure it’s done right because my home represents the biggest investment I’ve made.

For homeowners in Colorado (or other wintery locations), refinishing the deck this fall will help protect it from the winter elements like sleet, snow and ice.  Also, having your deck and your house in the best condition going into the rough winter months means that you’ll minimize any damage that could be caused by harsh weather conditions.

Preparation

To get the maximum benefits out of your efforts, take the time to make any necessary repairs to your deck or siding before you start painting.  This could include patching any imperfections in your siding and sanding away peeling paint. On the deck, replace warped boards and nail down loose ones. A good cleaning ensures that the surface is ready for stain or paint.

Get The Right Tools

Once you’re ready to paint, make sure you have the right tools for the job. It will make the task quicker and easier, and provide more professional-looking results. Paint brushes and rollers have their place as useful tools, but for making quick work of painting a house or finishing a deck, nothing beats a power paint sprayer. The beauty of outdoor painting is that a paint sprayer can be used to get the job done in a few easy strokes.  If you decide to buy a sprayer, do your research because all sprayers are not the same.  I’ve found that a good one will run $300 or more; don’t invest in a cheap one or you’ll be sorry.

Enjoy The Fruit Of Your Labor

While you’ll enjoy the fresh, refurbished look of your home and deck now, you’ll really appreciate it in the spring when you can step outside and start enjoying your deck as soon as the weather permits. You can sit on your deck and sip your favorite beverage while you watch your neighbors tackle the outdoor tasks they put off this fall.

Who Does The Job?

The simplest way to get the work done is to hire a licensed HVAC (Heating Ventilation Air Conditioning) professional. I usually call Service Engineering in Colorado Springs (471-1111) to do mine. Sometimes your utility company may provide the service.

What is Involved?

The technician will clean soot and corrosion out of the combustion chamber where the fuel is burned, and check it for leaks or damage. He’ll inspect the flue pipe for open seams, clogs, or corrosion that could cause carbon monoxide to backdraft into the house. He’ll replace the filters on oil and forced-air systems. Finally, he’ll test the exhaust from your cleaned machine and use the information to adjust the burner for maximum efficiency.

How Much Will It Cost?

You’ll pay between $100 and $180 for the service, depending largely on whether you have a gas system, which is easier to maintain, or oil, which requires a fair amount of soot removal. Usually the cost is covered by an annual maintenance contract that also provides 24-hour emergency service. While the technician is there, he should also service your water heater, assuming it has a separate oil or gas burner, but that may cost more money.

When Is The Best Time To Do The Work?

Ideally, have your system tuned up in the fall so it’s in top shape for the start of the heating season. Of course, that’s when technicians are the busiest, so if you can’t do it when you want, do it when you can—as long as your system is serviced once a year. And don’t expect your provider to call to remind you that it’s time. Even if you subscribe to an annual service plan, you still need to call to make an appointment. Call in the spring or summer to be sure of getting on the schedule in the fall.

One report I enjoy reading through is a supply/demand table and chart. The PDF I have linked to this article shows how many homes are for sale (supply) for each price range, and how many homes have sold last month and in the past six months (demand). We added a column to the far right to show the Average Months of Supply for each $50,000 increment.

Click here to download the PDF.

The Hot Market Is Under $200,000

Homes in this price range make up only 34% of the homes for sale, but they represent 54% of the total sales. What’s more, they are flying off the shelf, with a supply of only 2.82 months. This means a home priced under $200K is averaging only 82-85 days on the market before it is sold.

The Ugly Market is $600,000 and Higher

Homes for sale in this price range make up 9.8% of the homes for sale, and they represent a mere 2.0% of the total sales. Homes priced at $600,000 and higher are averaging 32.3 months which is over 2 ½ years fore it is sold. This shouldn’t surprise anyone since as the price goes up there are naturally fewer and fewer buyers who can afford such a property.

Perhaps the hardest cases are those properties priced over $2,000,000. There are 14 poor souls trying to sell in that price range, yet there have been zero sales. This means they will need to be prepared for their home to be on the market for an extended period of time.

Skewing of the Data

Many sellers still list their homes for a higher price than the market will accept. Some folks have a home priced at $225,000 that really should be priced below $200,000. these listings skew the data somewhat, but I’m not sure how to account for that.

Conclusion

It’s still a buyer’s market, and homes are still selling.

Click here to read it online.

-or-

Click here to download it as a PDF.

It explains how to make an Emergency Supply Kit, including crucial elements such as food, water, first-aid supplies, drugs and medication, clothing and bedding, family documents, and other emergency supplies and tools. Please take a moment and look over your own Emergency Supply Kit if you have one. Make sure it’s up-to-date and has all the essentials. And if you don’t have one, now is your opportunity to make one!

—Ray Brown

Also, click here to download a PDF with all the supporting information that Bill uses in this video.

Just click on the image to the right to download.

Once again, I’ve been blessed with a lot of referrals and repeat clients! This year 96% of the homes I helped clients buy and sell came from referrals! Thank you!

Here is a partial list of homes I helped people buy and sell this year:

434 Saber Creek Dr ($462,000)
3820 Wavy Oak ($427,500)
3330 Double Tree Ct ($405,000)
15610 Terra Ridge Cir ($359,000)
5855 Cliffside Terrace ($335,500)
7453 Campstool Dr ($288,000)
7732 Scarborough Dr ($268,799)
6386 Mesedge Dr ($252,000)
3014 Escapardo ($232,500)
4745 Walking Horse ($225,000)
15691 Dawson Creek ($216,000)
6337 Brightstar Dr ($206,500)
7316 Amberly ($201,000)
2610 Haystack Dr ($198,250)
6908 Summer Grace St ($195,900)
5101 N Hackamore Dr ($178,000)
8160 Contrails Dr ($178,000)
2944 N Roche ($177,700)
2206 Tesla Dr ($172,900)
1248 Piros ($171,900)
8210 Oakton Ct ($149,900)
2240 Calistoga ($110,000)