Posted by Chris Tesch on Thu, Apr 26, 2012
This is usually the time of year when College Station and Bryan residents have gotten through tax season, heaved a sign of relief, and gone back to working on more important matters – like earning enough to make reducing taxes a goal worth pursuing.
This year, the latter part of April may be a little different. Because this is an election year, tax matters are already being widely debated, and changes that could affect everyone are more possible than usual. I am bringing these topics up for discussion with the firm caveat that your own planning (including College Station home buying decisions) should always be made after consultation with the financial experts you trust. Currently, federal and state rules carry tax benefits that can greatly reduce a homeowner’s tax liability. They are very unlikely to be eliminated, but you may want to keep your ear tuned whenever you hear these topics under discussion, because seemingly minor changes can have major impacts.
Mortgage Interest and Points
Many renters found that they were able to use the standard deduction tables to simplify their federal filings. Homeowners, on the other hand, were usually better off using itemized deductions because of the welcome mortgage interest deduction. Qualifying points paid to obtain a mortgage can also generally be deducted in the year they are paid.
IRA Penalties
Everyone with a standard Individual Retirement Account has heard about the penalties for withdrawing funds before retirement age. But currently there is an exception in some home buying situations. Generally, some IRA funds can be applied to home buying (or building) a first home without those tax penalties. The catch is that you can only withdraw up to $10,000 over your entire lifetime (not annually). Those with Roth IRAs may find additional tax advantages, too.
Real Estate Taxes
Qualifying Bryan and College Station property taxes can amount to sizeable deductions. If, in the home buying process, you reimbursed a seller for prepaid property taxes, that amount can qualify, too.
As in all financial planning, you should consult your accountant or other tax professional before making any important decisions. And whenever buying or selling a College Station property makes sense for your family, I’m standing by to answer all of your College Station real estate questions.
Posted by Chris Tesch on Mon, Apr 23, 2012
Interest rates are at historic lows. The economy is looking up and jobs are up within Bryan and College Station. We still, however, get the questions about whether it is wise to buy. Let's start with what the experts are saying.
With more than 1,000,000 members the National Association of Realtors® is the nation’s largest trade association. It’s no wonder that what it says carries a lot of weight. When a gargantuan outfit like NAR makes a prediction, its words may not always make headlines, but they do influence everyone whose job it is to forecast the future of the nation’s economic activity.
That’s why their most recent report dealing with pending home sales put smiles on many of those one million members’ faces.
“The spring home buying season looks bright,” according to Chief Economist Lawrence Yun. “If activity is sustained near present levels, existing-home sales will see their best performance in five years.”
Like all statistics, those he was describing can be looked at in more than one way. We know that some numbers are more reliable than others. This particular index is based on an unusually large sample: about 20% of all transactions for existing home sales. It’s a forward-looking indicator: in the past, it has signaled coming trends before they materialize. This index seldom produces a straight line of activity because of seasonal and monthly ups and downs, but this time a trend is evident that is “notably above the pattern from a year ago.”
Our Bryan and College Station home sales patterns are not invariably tied to national trends -- but they aren’t impervious to them, either. So we are pleased when our own impression that the spring market is looking up is borne out by the experts who deal in the broader picture. “Based on all of the factors in the current market,” Yun went on, he expects to see “sales rising 7 to 10 percent in 2012.”
Real estate is a famously local phenomenon, and although we keep an eye on the national and state markets, our real attention is always centered right here in Bryan and College Station . If you have questions about your own real estate outlook, call me anytime for a consultation focused on your neighborhood.