“Tax Advantage” is not necessarily an oxymoron!

If you have recently bought or sold a home, there are a few tax advantages that may be available to you. Generally speaking, real estate broker’s commissions, title insurance, legal fees, advertising costs, administrative costs and inspection fees are considered selling costs and may reduce taxable capital gain by the amount of the selling costs.

However, every year the tax code can change and your situation may be unique. So the following is provided only as a guide. It is highly recommended that you seek a professional tax consultant to be sure.

janfincThere are several other key areas where you might benefit:

Mortgage Interest: Within limits, it may be tax-deductible. For example, a married couple filing jointly can deduct interest payments on a maximum of $1 million in mortgage debt secured by a first or second home. Buyers may also be able to deduct some of the interest they paid on a home equity loan or similar line of credit.

Points: Points or origination fees on a home loan paid during purchase are generally tax-deductible in full, for the year in which they were paid.

Refinanced mortgage points: These may also be deductible, but only over the life of the loan. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.

Improvements: Improvements made to property prior to the sale (or once one moves in) might qualify for an interest deduction on your home-improvement loan. Qualifying capital improvements are those that increase your home’s value, prolong its life, or adapt it to new uses, such as adding a porch or installing energy-efficient windows.

Real Estate Taxes: During a sale, the seller will send the local tax collector’s office a check for real estate taxes prior to the closing. In many circumstances, however, the buyer will pay a pro-rated portion of the taxes for the year at closing. This tax deduction also gets overlooked.

Business Use: For new buyers who work at home: If a room is used exclusively for business purposes, they may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.

Moving Costs: If you have moved because of a new job, moving costs might be deducted. These can include travel or transportation costs, lodging, and fees for storage of your household goods.

In today’s economy, it’s critical that we take advantage of every possible tax break. A home provides a great opportunity to do just that.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!

A Souped-up Laundry Room Can Make a Difference

blog3The laundry room is one of the most forgotten areas to get in shape. Machines are often dusty, detergent dripping down the sides and lint and old socks on the floor. Yet it doesn’t take much to make a real difference:

Add energy-efficient appliances: The U.S. Department of Energy claims that machines with the ENERGY STAR label can decrease water costs by up to 50%. There are machines that adjust water temperature and amount for each load to prevent excess and waste.

Add a touch of pizazz: Consider designer colors, pedestals or sleek designs that can make a bold statement.

Choose the best type appliance for you: Top loaders require enough water to cover all the clothes in its drum. Front loaders can reduce that by two-thirds—less water for larger loads. While they look great, they can be more expensive and can develop mold because they don’t empty as efficiently.

Don’t forget the dryer: Moisture sensors recognize when laundry is dry more quickly than traditional machines and shut down sooner. This saves energy, cash and wear-and-tear on clothing.

Consider steam: The use of steam washers and dryers for greater energy and water efficiency is also a growing trend. They offer enhanced clothing-care options such as short, steam-only cycles that help to reduce wrinkles and remove odors without using water and detergent.

Laundry rooms used to be relegated to the basement. Today, people are finding space in more convenient areas of the house—like the kitchen, upstairs or near bedrooms. Experts agree that a laundry nook will raise the value of a home, making it more convenient as hauling baskets of clothing up and down flights of stairs become a thing of the past.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!