Columbia SC tax deductions are valuable commodities. And like most valuables, they are often well guarded. Deductions have been compared to buried treasure — because they are so valuable and they’re often buried, or at least hard to find. Deductions reduce the amount of income you’re taxed on, which reduces your tax liability. Here are a few deductions that are often overlooked.
5 Overlooked Columbia SC Tax Deductions
Charity. Most people are aware they can deduct charitable contributions. But, did you know that if you volunteer your time you can also deduct 14 cents per mile to and from the charity’s location? In addition, you can deduct the cost of supplies needed for the work you perform for the charity.
State Sales Tax. When you’re filing your tax return, you have to choose between deducting state sales taxes and state income taxes. So, this deduction is best for those taxpayers that don’t have a state income tax.
Dependent Care Credit. While most parents of young children are familiar with the dependent care credit, many may not be aware that it may also apply to summer day camp costs. You may even qualify for a deduction for adult dependent care. Some restrictions apply, of course, but it may be worth looking into when you’re looking for Columbia SC tax deductions.
Retirement Plan Contributions. Contributing to your retirement plan can earn you a deduction. If you are in the low to moderate income range, you may also be able to earn a tax credit for the contributions to your retirement account. For more information, search the web for Retirement Savings Contribution Credit.
Job Search. If you’re searching for a job, you can deduct a number of things such as employment agency fees and resume preparation costs. Every dollar you can deduct can save you from 10 cents to 40 cents on your income taxes. So it pays to find as many Columbia SC tax deductions as possible that apply to you. Be diligent in your search, or even better, consult a tax professional well versed in deductions for which you may qualify.
For more information on Columbia SC taxes, see our articles to the right under Taxes below Columbia SC Real Estate Categories.
Columbia SC mortgage lenders have “seen it all.” With banks paying low interest rates and the stock market in the midst of a mini-crash, it's tempting to just keep your cash at home. However, if you’re planning to buy a home and need that cash for a down payment you’d better rethink that investment “strategy.” You won't be able to use it unless it’s accounted for.
Columbia SC Mortgage Market: Cash Isn't King
In a recent survey by American Express, 57% of consumers say they have cash in a bank account. Surprisingly though, 53% admitted to keeping additional cash stashed in their home.
If you’re preparing to go to a loan closing, cash isn't king. You’ll need a cashier’s check from a bank or other financial institution. One mortgage lender says, “Cash on hand is unacceptable… No title company is going to accept (actual) cash… at the closing.” The lender will view the cash with a big red flag, and will assume it was gained illegally — despite your claims to the contrary.
Nowadays, real estate agents and mortgage professionals are keenly aware of the possibility of money laundering. Even bringing a modest amount of cash to a closing could prompt the filing of a Suspicious Activity Report with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department.
In a 10-year study from 1996-2006, FinCEN reported that 20% of residential real estate sales transactions earmarked as suspicious showed evidence consistent with money laundering.
If the financial institution can’t document a legitimate source of the cash, even a mortgage pre-approval letter from a Columbia SC mortgage lender is virtually useless. A pre-approval letter states there is sufficient income, assets and a qualifying credit score for financing. The pre-approval is still subject to final verification by a credit underwriter at the mortgage lending company.
As a result of the Secure and Fair Enforcement for Mortgage Licensing Act of SAFE Act of 2008, and increased safeguards on “stated income” loans in the Dodd-Frank law of 2010, lenders must account for every dollar in a mortgage lending transaction.
In addition, the Patriot Act in 2001 tacked on more restrictions to discourage terrorist groups from money laundering in mortgage transactions.
Cash savings must be on deposit in a financial institution account to be counted as part of the overall asset evaluation. Plus, it has to be in the account at least 60 days for mortgage lenders to term the cash “sourced and seasoned.” A cash gift from a relative must also be documented to make sure that money isn’t considered a loan which may hurt the borrower’s debt to income ratio.
Columbia SC mortgage lenders advise if you’re planning to buy a home with a mortgage loan, deposit the cash into a bank account as soon as possible. Don’t be surprised when your bank files a Currency Transaction Report (CTR) with the IRS. Even smaller cash deposits over short periods to “fly under the radar” of the legal reporting limits of deposits over $10,000 will be reported.
Despite the warnings, mortgage lending experts say around 5% of loans each year involve cash money issues. Most of them can be ironed out — as long as the borrower informs the lender early in the process.
Get more Columbia SC mortgage tips and information by looking up our other articles in the Columbia SC Mortgage Info list of articles under Columbia SC Real Estate Categories. We also post mortgage related news and information on our Facebook page and on Twitter. Check us out there as well.
Columbia SC home selling needn’t be a lengthy process. Pricing your home correctly will help it will sell quickly and at a good return on your investment. The best method to use to establish a price is to look at recent sales of similar homes in your market. This research along with the expertise of a knowledgeable real estate agent will prepare you for a successful sale. Although we never work for sellers or list property for sale and always represent home buyers only, we know and can find the very best listing agents anywhere to help you with selling your home. Consider these Columbia SC home selling tips.
6 Columbia SC Home Selling Tips
Look at recent comparable sales. In a changing real estate market, look for comparable sales occurring in the past three months. Sales much older than that may mean a contract was signed months earlier than the sale was closed. Generally, a sale that’s over six months old probably isn’t a good indicator of current market conditions.
Recognize that finishes and fixtures make a difference. Buyers today look for newer or renovated homes with neutral paint colors. They consistently sell faster and more often than older-looking homes that haven't been updated. Take that into consideration when comparing your home to renovated ones. If it doesn't meet the same standards, it probably won’t sell for as much. Consider renovations or upgrades. The difference in the sales price of a renovated home and one sold "as is" will be substantial. It will likely cost less to do the remodeling.
All homes are different. Just because your home is the same square footage and has the same number of bedrooms and baths as a home that just sold doesn’t necessarily mean your home will sell for the same amount. The floor plan, age, functionality and lot size will have an impact on what your home should sell for. Buyers are looking for livable floor plans and what designers call “flow.” A home with an open kitchen/living area with three bedrooms and two or three baths is more attractive than a home that’s chopped up, doesn’t flow well and has fewer bedrooms and baths.
Pay attention to the little things, they may affect price. When you’re weighing comparable sales, make sure they are really comparable. A home close to yours may not be in the same school district or on the same tax map, affecting the value one way or the other. A smaller home that sold for, say, 20% more could have been on a larger lot — or double lot — that may have been divided, making it more attractive to a buyer. Pay attention to prices that are too high or too low. With a little more research and with the help of your agent you may determine those homes are not true comparable.
Visit homes for sale. Checking out the competition in your market will help you greatly. Go to open houses and take sales tours. Ask questions to determine how the homes compare to yours. If you’re planning to list your home in April, visit homes for sale in January or February. They will likely be under contract or closed when your home hits the market. If they are still for sale, chances are they were overpriced.
Your agent is a valuable resource. The sooner you add a qualified real estate agent to your team, the better. Good agents show properties on a regular basis and are intimately knowledgeable about the local real estate market. They can also explain pitfalls to avoid and offer tips to stage your home to show best and ultimately sell quicker and for the highest price.
Remember, selling your home is ultimately your responsibility. Follow these Columbia SC home selling tips. Use your agent for his or her expertise, but do you own independent research. You’ll be more confident in the process and happier with the outcome.
Columbia SC home buying just got a little easier, thanks to home buyer education classes. For those receiving down payment assistance, a home buyer education course may be a requirement. Mortgage lenders may also require the course. The classes can be very informative for anyone thinking of buying a home.
Take a Columbia SC Home Buying Course
While some home buyer education classes charge a fee, some are free. They are often available online. A certificate from a HUD-approved agency is needed for lenders requiring classes for borrowers.
The course provides beneficial information about the home buying and mortgage process. Subjects include personal budgeting, credit scores, finding the best mortgages, homeowners insurance, home inspections and how to select and work with a real estate agent.
A recent survey of 1,000 people revealed nearly 75% of consumers think the home buying process is complicated. Recent mortgage disclosure requirements have made it even more confusing.
Experts suggest buyers enroll in the class as soon as they decide to enter the Columbia SC home buying market. Do that, they say, before you select a home or a lender. The class will teach you how to shop for both.
The course can be very important to prospects with credit problems or with little or no credit. Anticipating the questions a lender may ask will empower you and better prepare you.
A first-time home buyers course will help with the following topics:
How does a credit score work? Lenders use credit scores to determine if you qualify for a loan and, if so, what the terms will be. You should know your credit score before taking the class.
Why is a home inspection needed? While most lenders don’t require a home inspection, it’s a good idea to have one to be safe. It will let you know about any needed repairs the home may have. Knowing that up front gives the buyer information that can be used in negotiating the sales price.
How to choose and work with a real estate agent? Since real estate commissions are normally paid by the seller, there is no cost for a home buyer to select and work with a real estate professional. Establish a relationship with the agent you choose and make sure he or she understands what you’re looking for in a home.
How can I save water and electricity in my new home? Because your monthly mortgage payment is just a portion of the cost of home ownership, it’s important to know how to budget for the other costs. Water, heating and cooling, trash collection and other fees will increase monthly expenses. A home owner class can provide money-saving tips.
What costs can I expect when I get ready to close the loan? In addition to the down payment you’ll have to make, you’ll also have to pay closing costs. Items like title insurance, appraisal fees, real estate taxes, homeowners insurance and other costs are your responsibility at the loan closing — unless you’ve negotiated with the home seller to pay some or all of them.
How do I shop for the best mortgage? Mortgage lending programs vary among lenders. Interview several lenders to find out what they offer and what best fits your needs. Then you can provide your financial information for them to perform the underwriting to make sure you qualify.
How do I obtain ownership with another person? Real estate titling varies by state. How the title is set up will determine, for example, whether the co-owner’s interest will transfer to you upon their death, or be left to surviving relatives.
Where can I find assistance with a down payment? There are programs available in some cities that offer grants or loans for down payments for first-time buyers. The class may assist in helping you find those programs as you enter the Columbia SC home buying arena.
Get more Columbia SC home buying tips by finding our Columbia SC Homebuying Tips articles to your right just below Columbia SC Real Estate Categories. Don’t forget to find us on Facebook and Twitter as well.
Your Columbia SC home, no doubt, is one of your favorite possessions. But what happens if a pipe bursts or the water heater stops working? When you were a tenant you simply called the landlord. As a homeowner, now it's your responsibility. Enter the next best thing to a landlord… a home warranty.
Columbia SC Home: Peace of Mind
So just what is a home warranty? Think of a home warranty as insurance coverage for the cost to repair or replace just about any system in your home that may malfunction or wear out. Typical coverage includes heating and air conditioning systems, hot water heaters, certain electrical systems and appliances. Most home warranties cost between $300 and $900 annually.
The beauty of a home warranty is that if something goes wrong, you don't have to call various companies to get repair estimates. And you don't have to pay anything additional out of pocket to fix the issue or replace the equipment. All you have to do is call your home warranty company or enter a claim online. The company then contacts the technicians they work with and either send a repairman or replace the item in question. The only added expense you may have in the case of a brand new replacement would be a co-pay (or deductible) of around $50 per occurrence.
Is a Columbia SC home warranty right for you? The answer is maybe. Home warranties are usually a good idea for first-time homeowners like Gen Xers and Millennials. They're used to calling their landlord, and for the most part, have little or no experience in tackling home issues. In addition, these younger homeowners often work long hours and may not have the time to make lots of phone calls to get repair quotes. Plus, they can't very well take off from work to wait on the repairmen to show up.
When your home was inspected for lending purposes, you may remember the condition and life expectancy of some of your home's systems. Some appliances and systems begin to fail after 15-20 years. And, as luck would have it, when one item goes bad another one soon follows. That's a reason many homeowners welcome a home warranty – it's just one more form of insurance that provides them peace of mind.
Home warranties are also popular with investors or landlords who may have to deal with multiple potential problems in more than one rental property. Most investors have other businesses or other jobs, and the last thing they want to have to worry about is finding a plumber to repair a broken water pipe in the middle of the night.
In summary, home warranties can save home buyers time and money – especially in the first year of home ownership. One last tip, remember the older the home the more coverage you may need to have.