Posts Tagged as Shrinking Taxes

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

The Proposed Tax Change and Potential Impact to Home Buyers

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

Introducing ‘The Realtor Party’
In efforts to ‘save home ownership’ and leave homeowners as a favored class in the tax code, realtors nationwide protested, lobbied legislators, and warned clients about the threat of unfavorable real estate market impacts under the new tax law.

How the Changing Tax Codes Could Reduce Home Prices
According to real estate news, the new tax law could make home ownership less attractive, raising the cost and potentially depressing property values. What tax changes could bring this to pass?

– Property Taxes
The new law places a cap on the combined state and local income/property taxes with a single deduction limited to $10,000.

– Mortgage Interest
Under the new law, the standard deduction is almost doubled, so fewer homeowners will itemize, losing the full benefit of the mortgage interest deduction.

– Capital Gains
The qualification time for capital gains exclusions could increase, likely reducing transaction volume as sellers wait longer to list.

– Mortgage Rates
The $1-trillion+ the new law may add to the federal deficit could result in more rapidly rising mortgage rates according to economic theory, raising the cost of financing.

Big Winners… & Big Losers
According to some economists, smaller markets could feel little-to-no effect, while those in high-cost, high-tax areas like NY and NJ could see significant declines in home values: As much as 14% by 2019. Other real estate news analysts expect little effect, however, as many households already choose not to itemize. Rising demand/limited supply are expected to continue to drive the market upwards.

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Millenials Flock to Home Auctions

Accounting Hacks to Help Small Firms Shrink Taxes

Small business owners, independent contractors, and micro-entrepreneurs, lend me your ears! Treat your real estate selling job right, and Uncle Sam may let you keep a few more of your hard-earned Benjamins.

Tax hacks to come; see and conquer this 2017:
By law, we at Properties Online cannot give tax advice, but we do have a few hacks for making your ridiculously complicated 1040-CRAZY journey a little less harrowing:

• Keep things separate.
Shared accounts create complications. Instead, pay every business expense and deposit all income in a separate business checking account. Big bills come before the big check? Use a business credit card, paying charges directly from your business checking account. Keeping all transactions electronic allows you to simply export data to a spreadsheet for taxes later.

• Harvest data more easily.
Ditch the shoebox from hell and stop mining for receipts under your car seat. Take an Evernote photo of every receipt (or screen shot of online purchases) as soon as the purchase is paid, for easy sorting and searching. Correspond social business purchases (lunch, parking, etc.) with a detailed calendar.

• Go the long haul.
Toss your daily calendar on the front seat, logging daily time, addresses, and events, and finally start taking advantage of mileage deductions. At the end of the month add them to Evernote. At the end of the period, you may be shocked to discover how much they add up to.

• Backup your backup.
Copy your calendar into Evernote each month, backing it up to the cloud.

• Know when to farm things out.
Paying a small company in your neighborhood to do all your tax prep work while you’re out selling real estate is likely a far better solution than you re-reading tax prep instructions ad nauseam and searching for loopholes on Google.

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