10 Tax Savings for Missouri Homeowners

Are you a homeowner in Missouri? The Boehmer Team would like to make sure that Missouri homeowners get the most from their tax return. The following deductions can result in valuable tax savings for taxpayers who itemize.  For reference while doing taxes, IRS publication 530 specifically covers “Tax Information for Homeowners”.

1. Mortgage Interest Is Tax Deductible

Did you paid interest on your mortgage last year?  Claim it! Don’t forget that mortgage interest and taxes are also generally deductible for second homes, too.

2. Mortgage Points Are Tax Deductible

If you bought a home in 2015 with a mortgage, then in addition to the mortgage interest (which may not be a lot if you bought late in the calendar year), you can probably write off the points (both origination and discount points) on your tax return. The challenge is whether you’re eligible to deduct the points all at once, or whether you have to spread the costs out over the life of the loan. Generally, if you bought your first home or got a loan on that first home, you can take the deduction all at once, the IRS says. For a second home, and often for a refinance on a first home, the IRS says you most likely have to spread it out. 

3.  Property Taxes Are Tax Deductible

Many taxpayers overlook the fact that homeowners can deduct local, state and even foreign real estate taxes on their federal returns. Lower-income homeowners may also get special property tax benefits from their state or municipality, so look into further breaks specific to your community.

4. Mortgage Insurance is Tax Deductible

The cost of insuring a home mortgage is deductible up to certain income limits. If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums.

5. Interest on Home Equity Loans are Tax Deductible

Interest on home equity loans and home equity lines of credit are tax deductible.  

6. Discount Points are Tax Deductible

Discount points are normally deductible when purchasing a home. So if you purchased a home in 2015 they are deductible. But when refinancing, they are typically amortized. 

7. Losses From Weather, Fire or Theft May Be Tax Deductible:

“If your home is damaged as a result of fire, flood, or similar event, you may be able to take a deduction for the loss.  To do so, the property must be damaged, lost or destroyed by a sudden, unexpected or unusual event. Loss cannot be gradual, such as insect damage or water damage from a leaky roof,” according to Stacy
Champagne of accounting firm T.A. Ohlms, LLC. “The amount of the deduction is generally determined by the difference in the fair market value of the property before and after the loss, OR by the cost of the necessary repairs to restore the property to its original condition. After the loss is determined and the insurance reimbursement subtracted, the loss deduction is generally reduced by $100 for each casualty, any casualty gains, and 10% of your adjusted gross income.”
While nobody wants a tree to fall on their house or for burglars to make off with their flat screen, the IRS grants a break to any property or casualty loss that is more than 10% of your gross income and is not reimbursed by your insurance. Documentation is key, both to prove values and the circumstances under which something was lost. Casualty losses are reported on Form 4684 and deduction on Schedule A. 

8. Energy efficiency Tax Credits

Congress recently extended the “Nonbusiness Energy Property Credit” for installing energy efficient windows, fans, air conditioners, etc. The credit allowed is up to 10% of the purchase price of qualified products, up to a maximum of $500 for all of your home improvements (maximum for windows is $200).  The $500 is a “lifetime” cap.  Written certification from the manufacturer is needed.
Another credit available is the “Residential Energy Efficient Property Credit.” This could be worth up to 30% of the cost of installing certain renewable energy sources in your home and may be claimed for newly constructed homes.  This includes solar hot water heaters, solar electric equipment, and wind turbines. There is no dollar limit on the credit for most types of property. Use Form 5695 to figure your residential energy credits.  

9. Some Home Renovations Are Tax Deductible

Generally you cannot take a tax deduction for renovations. The amounts spent are added to the cost basis of your home, so you should keep track of them.  If you obtain a home equity loan or home equity line of credit to fund the renovations, the interest would be deductible (up to IRS limits).
“Home improvements made for medical reasons, however, can be tax deductible,” says Stacy Champagne of T.A. Ohlms, LLC. “If you are making home improvements to accommodate a chronically ill or disabled person, and the renovations do not add to the overall value of the home, the project costs are typically deductible as medical expenses on Schedule A.  Examples are entrance/exit ramps, widening doorways of hallways, installing railings/support bars and other bathroom modifications, modifying stairways, etc.  Be sure to save your receipts.”  Note: total Medical expenses (on Schedule A) must exceed either 10% of your adjusted gross income (if born 1951 or after – otherwise it’s 7.5%)

10. Missouri-Specific Tax Credit for Homeowners

Champagne also says that for Missouri homeowners, “The Missouri Property Tax Credit Claim is a program that allows certain senior citizens and disabled individuals to apply for a credit based on real estate taxes or rent they have paid for the year.”  Details can be found at http://dor.mo.gov/forms.

How The Boehmer Team Helps at Tax Time

Did you know that The Boehmer Team sends a tax settlement letter to all their clients who bought or sold a home the previous year? We go above and beyond so that you don't have to hunt for your paperwork when tax season comes after a move. Just another reason to use The Boehmer Team.

References:

• Stacy H. Champagne, CPA, Partner at T.A. Ohlms, LLC   4600 Executive Centre Parkway, Suite A, St. Peters, MO 63376  stacy@taohlms.com
• https://www.energystar.gov/about/federal_tax_credits
• https://www.irs.gov/publications/p936/ar02.html 
•  http://www.marketwatch.com/story/10-homeowner-tax-breaks-you-should-be-taking-advantage-of-2015-04-02
• http://www.usatoday.com/story/money/personalfinance/2015/04/04/irs-taxes-homeowner/23938151/
• http://dor.mo.gov/forms 

Why Home Builders Love Low-E Windows (And Why You Should Too)

Why Low-E

The effect on the comfort level of a home’s occupants is one reason home builders like Low-E windows. Low-E has the ability to keep the temperature of the surface of the glass facing the interior very near that of the room itself, regardless of outside temperatures. For example if it is 0 degrees F outside, the inside surface of double pane glass can be as much as 30 degrees warmer than single pane glass but still 25 degrees lower than Low-E coated glass. The converse can be true during hot summer months. 

Another great reason for Low-E windows is energy efficiency. They are energy efficient because any material that reflects, absorbs, and emits radiant energy is going to save energy. Regular uncoated glass windows will take in heat during the day but release it right back out through the glass at night. This is why in some houses a room can be very hot during the day and freezing when the sun goes down. The result of this heat transfer is using our heating and cooling appliances more than we need to. No matter what type of Low-E windows you get, they will perform better than windows that have only clear glass.  

What is Low-E?

The ability of a material to radiate energy is known as emissivity. In general, highly reflective materials have a low emissivity and dull darker colored materials have a high emissivity. All materials, including windows, radiate heat in the form of long-wave, infrared energy depending on the emissivity and temperature of their surfaces. Radiant energy is one of the important ways heat transfer occurs with windows. Reducing the emissivity of one or more of the window glass surfaces improves a window’s insulating properties.

Low-e coatings have been developed to minimize the amount of ultraviolet and infrared light that can pass through glass without compromising the amount of visible light that is transmitted. Low-e glass has a microscopically thin, transparent coating – it is much thinner than a human hair – that reflects long-wave infrared energy (or heat). When the interior heat energy tries to escape to the colder outside during the winter, the low-e coating reflects the heat back to the inside, reducing the radiant heat loss through the glass. The reverse happens during the summer time.

 

What Low-E Is Not

Low-E is not the same as tinted glass. Tinting is the adding of alloying materials to the glass itself. Also, tinted glass tends to absorb sunlight and will get very hot when installed as a single pane, hence tinting does not improve insulating value.

The Future of Low-E

By changing the types of materials used in the ‘stack’ or layers of Low-E, or by increasing or decreasing the number of layers, we can now get more specific in choosing glass which will meet our exact project needs. Need high visible light but low U values? There’s a Low-E for that. Need greater protection from fading? There’s a Low-E for that. And it gets even more specific than that. Adding argon gas to the captive air space, as we all know, will improve insulating value. Adding various tinting agents to the glass itself will allow for even further refinement of the glass’s performance.

Is moving to a brand new home with Low-E windows and other high-end details on your mind? Contact The Boehmer Team. We can help.

Home Renovations That Pay Back

Whether you’re putting your home up for sale or planning to live in it for the foreseeable future, you may be considering home renovations. When the time comes to sell, it will be valuable to know the home renovations that pay off and those that don’t.  Also, knowing which home renovations pay back may help you make better decisions on which renovations you choose to make now.

Earlier this year Remodeling Magazine came out with their 2015 COST VS VALUE REPORT. This annual report is highly regarded and referred to throughout the remodeling industry. They’ve put this information online in a format that can be sorted so that you can make best use of the information.

The Cost Vs Value Report compares average cost for 36 popular remodeling projects with the value those projects retain at resale in 102 U.S. markets.

Snapshot of the 2015 Cost Vs Value Report

As the 2015 Remodeling Cost vs. Value Report makes clear, large-scale jobs aren’t likely to return sellers their full cost. But there are improvements worth doing in anticipation of an upcoming sale.

In the article 2015 Remodeling Cost vs. Value: Less Is More, Stacey Moncrief of Realtor.org writes, “Simpler, lower-cost projects tend to return greater value.”  

For example, steel door replacement is the least expensive item on remodeling cost vs. value list yet offers the most payback. Other projects expected to top near 100 percent payback include: the midrange garage door replacement, the upscale garage door replacement, the midrange wood window replacement, and the minor kitchen remodel.  

The headline of an article written by Jim Gallagher at StLToday.com sums it up, Remodeling: The payback is in happiness, not home value.

He writes, “In a new study of 36 types of home improvements, only two raised the value of a St. Louis home by as much as the job cost. A mid-range kitchen remodel would just barely pay for itself. So will replacing windows with mid-priced wooden ones. Every other job was a money loser.”

While you need to resist the urge to over-renovate, if you do, you should prepare yourself to not take it personally when you don’t get out of a project what you put into it. Although you put your heart and soul into designing it, your dream master suite addition may fail to add a big boost to your home’s appeal. Ultimately, you should be happy in your home. If you make a major renovation that is highly customized to you, enjoy it. It might just take a little longer to find the perfect buyer who will love those same customizations. 

Want to purchase a home that doesn’t need any renovations? Or do you need help selling a home that could use renovations? Contact The Boehmer Team. Our real estate expertise and resources for contractors and handymen will help.  

Update: The day this blog was published the National Association of Realtors released their own 2015 Remodeling Impact Report. You can click the link to the 49 page report. We found that the data is similar to the Cost Vs. Value Report referred to above but thought we should share this newly available information.

 

Preparing Your Home to Sell in the Winter Real Estate Market

The winter is a great time to sell your St. Louis or St. Charles area home. People do buy homes in the winter; in fact, buyers are more serious and more motivated during this season. Also, your home will have less competition in the marketplace. Even so, there are some things you can do to make your home stand out in winter real estate market.

Prepare for the Cold

When prospective buyers walk into your home in the winter they should feel cozy. Take time now to seal up any cracks or fix any windows that are damaged. Make sure you have a shovel and salt ready to keep walkways cleared of any snow or ice.

Check the Roof

If your roof needs any repairs do so before it is covered with snow and ice. Double check that there aren’t any leaks to repair. Make sure that by the end of the fall the gutters have been cleaned out of any leaves or debris.

Paint

Does any of the paint on the outside of your home need a touch up? What about the inside? You won’t want to paint outside in the cold and you may want to open some windows when you are letting interior paint dry. So painting before deep winter sets in is a good idea.

Clean and Organize

Deep clean your home. When the holidays come around you may be too busy or unable to complete some cleaning tasks, like cleaning out the garage or washing the windows. Make a list of things that need to be cleaned and organized and do the things that must be done before the St. Louis cold makes it unbearable.  You might even consider moving some things into storage (or a friend’s basement) before it gets too cold in order to make your house look and feel even bigger.

Take Advantage of Holiday Décor

Use mums or poinsettias to dress up a porch or foyer or hang a fresh pine wreath on the front door. In the winter you can make use of the season with Christmas lights to make your home for sale more inviting. Nothing feels like home more than a festively decorated house with all the touches of the season. But don’t go overboard, too many decorations and your space will feel cluttered.

Sell My St. Louis or St. Charles Area Home

Are you thinking of selling your St. Louis or St. Charles, Missouri area home this winter? Contact The Boehmer Team for more helpful tips to get you prepared for the winter market today. The Boehmer Team has been awarded St. Louis Post Dispatch highest selling agents and they would love to give a great home selling or buying experience to you.

Staging a Home to Sell

Staging a home for sale is beneficial for both sellers and buyers. According to Realtor.org: 37 percent of Realtors® representing sellers and 32 percent of Realtors® representing buyers believe that buyers most often offer a 1 to 5 percent increase on the value of a staged home. Additionally, 22 percent of Realtors® representing sellers and 16 percent of Realtors® representing buyers said the increase is closer to 6 to 10 percent.

Staging for a great first impression.

Meanwhile Realtors® on the buyer side believe that staging makes an impact in several ways; 81 percent said staging helps buyers visualize the property as a future home, while 46 percent said it makes prospective buyers more willing to walk through a home they saw online.

RESA (The Real Estate Staging Association) provides on-going statistics relating to home staging.  The most recent statistics show that staged properties sell 73% faster than properties that are not staged.

We asked our favorite local St. Louis area stager, Liz Connolly, of INhance IT! Home Staging some questions to help clarify the home staging process for sellers. 

What Homes Benefit From Staging

The Boehmer Team: How do you determine if a home can benefit from staging? 

Liz Connolly: Just about any home will benefit from staging.  The lower the price of the property the more it will benefit from staging.  Staging creates a vision of a lifestyle.  It draws the eye to the big picture minimizing flaws and accentuating the positive aspects of the property.  There are times, however, when the owner is not willing or able to make necessary repairs or there are just too many repairs to be made.  We encourage these sellers to list the home “as is”.  There is no point in staging a home if it is not in great condition.  In fact, we will not stage a vacant property that has not had the necessary repairs.  Staging can do a lot for a property, but can’t hide bad paint colors, dirty carpet, bad smells, etc.

Staging to update a space.

The Home Staging Process

The Boehmer Team: How long is the process of staging a home?

Liz Connolly: Once a client agrees to the staging we get them on the schedule and arrange to preview the home.  We are typically at least 2 weeks out as far as booking the install.  The home preview takes about 15 minutes – we walk through the home taking notes and photos and then go back to the office and create the “design plan”.  The actual staging process takes anywhere from 2-4 hours max.  We bring in a team of 5 professionals to stage the key living areas of the home:  living, dining, kitchen/breakfast, family/hearth, master bedroom & bathrooms.  We provide furnishings, area rugs, artwork, lamps, plants and accessories.  When we are finished the home shows like a display home and is ready for professional photography.

Staging an Occupied Home

The Boehmer Team: How does staging work when the home is occupied?

Restyle by staging for an inviting feel.

Liz Connolly: On an occupied property one of our stylists meets with the homeowner to assess everything that needs to be done prior to marketing the property.  This consultation takes about 2 hours and the seller is provided with a booklet outlining everything (curb through basement) that should be addressed prior to photos.  The stylist can come back and assist the seller with these projects, provide contractor contacts for completing necessary projects, and return to the property to prep the home for photos.

What Stagers Recommend to Home Sellers

The Boehmer Team: If you could recommend anything to a home seller when selling their home, what would you recommend? 

Liz Connolly: The 3 C’s:  Clean – hire a professional to give your home a top to bottom deep cleaning.  Clutter – edit your collections and belongings and pack away any personal collections and items that might distract the buyer.  Color – paint the key living areas (at least) a neutral color.  Something in the beige or gray family. 

Home Staging Style

The Boehmer Team: Does INhance IT! Staging decorate with a specific style?

Liz Connolly: Our staging style is transitional.  This is a style that translates well to almost any property and appeals to the widest range of buyers.  It is clean lined, neutral and elegant.

Staging shows what is possible so buyers don't have to imagine.

The Boehmer Team: How often do you turn your staging inventory to keep it current and in style?

Liz Connolly: We continually purchase new furnishings to the tune of around $400K per year.  As items become worn, dated or damaged they are donated to charity.  We partner with area realtors and organizations to furnish homes for those in need. 

Sell Your Home for the Most Money

When you sell a home with The Boehmer Team, not only do you get a team of real estate professionals, you receive the best help in the area for staging, handyman services or any other home-related services from our tried-and-true list of professionals.  We know the best professionals in the area to help you sell your home for the most money.

We would like to thank Liz Connolly from INhance IT! Staging for her home staging expertise. INhance IT! Staging is a full service staging company offering merchandising services for builder displays, spec homes, condominiums and re-sale properties.  They have staged homes priced from $42K to over $4million throughout the St. Louis & St. Charles County metropolitan areas. INhance IT!’s statistics this year are averaging 9 days from home staging to contract. Learn more about INhance IT! at INhanceITstaging.com.

Thinking of selling your home? Contact The Boehmer Team today.

What to Know When Getting Homeowners Insurance

Part of buying a home in St. Louis or St. Charles areas of Missouri is procuring homeowners insurance. While we recommend that everyone shop around, we turned to our favorite homeowners insurance expert, Craig Phillips, owner of Craig Phillips Agency at American Family Insurance, to get an expert opinion on the process.

Homeowners Insurance Mistakes to Avoid

The Boehmer Team: What is the biggest mistake that homebuyers make when procuring homeowners insurance?

Craig Phillips: More times than not, homebuyers do not take into account the cost of homeowners insurance or whether or not they can even buy homeowners insurance into their thought process when beginning the home buying process.  There are many factors that contribute to insuring their dream home and the cost they will pay can vary widely from one person or from one property to another, which could lead to them not getting the home they love.  They really should contact our agency the moment they consider buying in order to get prequalified per se.

How to Get Homeowners Insurance

The Boehmer Team: What is the best process by which homebuyers should go about procuring homeowners insurance?

Craig Phillips: All homebuyers, whether it is there first or last home purchase, should meet with a local reputable insurance agent in order to discuss the type and amount of protection they will need for their dream home.  Contrary to popular belief, all insurance companies and definitely not all insurance policies are equal.  The first step is to establish a face-to-face relationship with that local agent and go through the necessary steps to determine how much coverage is needed to protect their home, which by the way, isn’t equal to the purchase price of the home.  Coverage is the key.  Don’t let yourself be underinsured.

What to Look At When Getting Homeowners Insurance

The Boehmer Team: What is the main thing (or things) that people should focus on when obtaining homeowners insurance?

Craig Phillips: There is a lot to buying and maintaining insurance for your family.  There are few things that a homebuyer should do in order to protect their dream home the best way.  First, create that face-to-face relationship with a local reputable insurance agency like ours and go meet with them in person.  I know, that is contrary to what the internet world we live in says to do, but personal relationships do matter, especially when it comes down to protecting what may likely be the largest investment you will ever make.  Second, don’t get so hung up on finding the cheapest price that you sacrifice coverage or a relationship.  If you can’t afford the insurance, then you should really be shopping for a less expensive house.  Third, don’t forget to discuss life insurance with your agent and buy an adequate amount of life insurance outside of insurance obtained at work to protect this dream home for your family.  Tragedy can strike at any time to any family, so be prepared and your family will be able to maintain the family home for years to come.

The Craig Phillips Agency

The Boehmer Team: What makes Craig Phillips Agency at American Family Insurance stand out from other homeowners insurance companies?

Craig Phillips: At the Craig Phillips Agency, we believe your insurance is more than just a transaction between you and American Family Insurance.  We believe in providing you with best in class customer service and the peace of mind that you have the necessary financial protection in place to provide for you and your family in the event of a tragedy.  We put the customers’ needs first above anything else and always focus on protecting your family the best way we know how.

The Boehmer Team would like to thank Craig Phillips for his expert opinions on obtaining homeowners insurance in the St. Louis and St. Charles areas of Missouri. It is always good to shop around, but if you would like to contact Craig you can find him on Facebook at https://www.facebook.com/craigphillipsagency or by calling or emailing him at 636-947-4080 or cphilli3@amfam.com. If you are currently looking for a new home, search on our website www.TheBoehmerTeam.com.