Tax Update - Summer 2006

It's Tax Time! Looking for Deductions?

Many people overlook and don’t take deductions they are entitled to simply because they don’t know about them. Here are just a few that you might be able to use.

Moving and Relocation Expenses Can Be Deductible:
If you had to relocate much, if not all, your moving expenses could be deductible, including the cost of a moving company or truck rentals, storage, motels and travel expenses. There are several qualification for this deduction.

Job Hunting:
If you or your spouse changed jobs much of the expense incurred while job hunting can be deductible.

Investment Expense:
Did you invest in the stock market? If so, did you pay interest on a margin account? Did you do research for the investment?

Educational Expense:
Depending on the circumstances, much of the cost of additional schooling may be deductible.

Medical Expenses:
Some things you might not think of; Contact Lenses (including the materials to care for them), Birth Control Pills (if prescribed by a doctor), Stop Smoking Programs (over the counter patches and gum due not qualify), Driving back and forth to the doctors office.

Business Use of Home:
If you have an office set up in your home and it is used in connection with your employment a percentage of your normal housing expenses may be deductible. There are several rules in qualifying a home office.

Business use of your personal vehicle:
If you use your personal vehicle in the normal course of your employment, you may be able to deduct some if not all, of the mileage. You would be surprised how this one can add up.

'e' filing
 

The IRS and California are both pushing their electronic filing programs this year.

So what are the benefits to you?
When e filing you don't have to mail in you tax returns. I will be transmitting them to the IRS and the Franchise Tax Board as your tax preparer.

If you e file and have your refund directly deposited into your checking or savings account, the IRS says that you should receive your refund, if due, in as little as two weeks. The state is trying for 7 days.

I will be offering electronic filing service along with the RAC (Refund Anticipation Check) and RAL (Refund Anticipation Loan) programs.

The Refund Anticipation Check (RAC) and the Refund Anticipation Loan (RAL) are really short-term loans based on your refund.

RAC (Refund Anticipation Check):
This really doesn't speed things up. What it does is allow you to e file your tax return and have my fee for preparation of your taxes paid out of your refund.

RAL (Refund Anticipation Loan):
This will definitely speed thing up. With the RAL program you can expect to pick up your federal refund from my office in as little as two days after e filing your tax return or have it deposited to your bank account in about three days.

Is there a fee for f e filing of your return?
NO!

Is there a fee for the RAC and the RAL?
YES, a small fee. Remember, both of these programs are short-term loans against your refund

The sooner you file the sooner you’ll receive your Refund

Real Estate Market Update

What's Happening in the Real Estate Market?

It should not come as news to anyone the local real estate market had been going nuts.

The value of housing had been going up at an incredible rate. In many cases, a home would come on the market and be sold within just a few days, often with multiple offers.

It was not been uncommon for a property to end up being sold for tens of thousands of dollars over the asking price. Today’s market is far more stable.

Prices are holding fairly steady and are not going down.

What's Happing in the Mortgage Market?

No big secret rates are way down! The question often asked is,"When is the best time to lock in my interest rate when purchasing or refinancing"???

Opinions differ on whether or not to LOCK in an interest rate when you submit you loan application. A lock is a commitment by the lender to loan the money at an agreed interest rate.

The locked rate won’t change as long as you close the loan within a specified time period. There’s usually no fee charged for locking, but the longer the lock period the higher the rate. The lock periods are generally 15, 30 or 45 days. You can expect the rate to increase approximately 1/8 % for each increment in time. This is because the longer the lock period the more exposure the lender has to a change in the market.

One school of thought is that today’s market rates are not likely to sharply increase soon. Another opinion is that with the current economic uncertainty and the conflict in the Middle East, it’s safer to lock your rate in as soon as possible. Financial markets prefer stability. When the market is unstable rates can change dramatically in a matter of minutes.

Remember, it can take four to six weeks to process you loan. If you lock for 45 days when you submit your application, your rate could be as much as ½ % higher on your new loan. This is due to the processing period and length of the lock. Your other option is to hold off till the appraisal is done and your loan is fully approved and then lock for 15 days. Now, you’ll get the much lower rate.

What to do? What to do? Unfortunately some people will gamble looking for that bottom of the barrel lowest rate. It takes time to process your loan and the financial market can change in literally a heartbeat. We only know for sure that rates have bottomed out when they’re on the way back up.

It is important to talk these issues over with your loan consultant. The more informed you become, the more confidence you will have in your decision as to just when to lock your loan.