5 Ways Buying a New Home Changes Your Personal Finances

The decision to purchase a home definitely affects your financial bottom line. The down payment alone may decimate what used to feel like a healthy savings. 

Stop and consider both sides of the process to find advantages that make it all worthwhile. Read through five ways that home purchases affect your personal finances. 

1. Tax Implications

On the whole, first-time homebuyers receive a variety of helpful-deductible options to give a bank account respite. Some of these deductions include:

• Mortgage interest: although it may take more time to complete your tax return, you’ll find that it pays off. Whatever interest comes with your mortgage opens you up to certain helpful deductions in your overall tax payment.
• Tax-deductible points: those who pay extra on their loan or “points” receive another chance for a tax deduction. Every point equals 1 percent of your home’s principal price. However many points you earn provide a tax-deductible percentage. Consult a tax expert to find out if you’re eligible. 
• Private mortgage insurance: Those with a down payment that’s less than 20 percent of the purchase price usually require mortgage insurance. Although you might dislike this added cost, most private mortgage premiums qualify for additional tax deductions.

Regardless of which deductions you qualify for, make sure to consult a tax expert and the relevant official tax forms to ensure proper payment.

2. Reduced Spending Money

Those who buy a house often experience what’s referred to as feeling “house poor.” This term doesn’t refer to actual poverty, but rather a lack of extra cash due to the presence of a monthly mortgage payment.

Although your savings might feel a little reduced now, keep in mind that your home ownership adds greatly to your net worth, and even income potential. You are also gaining equity on your property as you make payments on your mortgage. 

Look at buying a new home this way, it is a large investment, but because you can put money and other things into it, you will eventually get back more than what you originally invested. Basically, you are paying yourself in a way because you own a home. Owning a home should also help you with your tax returns at the end of every year.

3. Lasting Payments

Unlike renters, homeowners make good use of every cent they pay towards their mortgage. While a renter-landlord relationship requires monthly payments that go into the landlord’s pocket, your monthly mortgage payments go towards the eventual ownership of your home.

True, mortgage payments might exceed your previous monthly rent payment, but the end result makes it all worth it. Homeowners who stay on top of their payments may end up owning their home and having access to equity, while renters never see any part of their payments again.

4. Various Expenses

On the other hand, renters may enjoy the convenience of one all-inclusive payment. Particularly in situations where landlords include utilities in the cost of rent, renters often have consolidated costs.

Homeowners pay for their own utilities, including water, gas, electricity, Internet, and garbage pick-up. And don’t forget about property taxes.

5. Home Loans

Although mentioned before, the presence of a mortgage creates a paradox for your finances. While your monthly loan payment might seem high, it’s the consistent payment that boosts your credit score and potential for future big purchases.

Remember that despite all the new expenses you might have, your financial persona now boasts of home ownership.

Informational Credit

The information in this article is credited to Sente Mortgage who specializes in home loans in Austin, Texas.

Three Personal Finance Tips for the Empty Nester

Your kids are all out of the house now and it’s just you and your spouse to live as you have always dreamed and do exactly what you have always wanted to do and nothing more. Right? Perhaps, but not quite. 

Those nightly dinner dates and frequent trips to the theater are certainly going to add up. If you thought your days of budgeting and being careful with your money were over, perhaps you need to shift your thinking a little. 

Here are some relevant tips for those baby boomers, empty nesters, and newly retired seniors who wish to enjoy life and have the money they need: 

Set Financial Expectations with Your Kids

You might be thinking that when the kids are all out of the house and living on their own, they will not depend on you financially anymore. However, according to the National Endowment for Financial Education, 26 percent of adults who are providing for children between the ages of 18 to 39 take on additional debt to help provide for their adult kids. 

Furthermore, seven percent of these parents will put off retirement to financially support their children. Now is the time to sit down and have a realistic and open discussion with your kids about what you are willing and unwilling to do for them once they reach adulthood. 

You may not have a problem providing finances for your kids but if it is not in your new and improved budget post-retirement, this is an essential conversation to have with your kids. 

Downsize Your House

A survey conducted by Rent.com in 2014 showed that over the past year, one-half of managers of approximately 250,000 properties had reported a significant increase in people who had formerly owned homes moving into apartments. 

While you don’t have to switch out a home for an apartment, moving to a smaller place makes sense for a lot of empty nesters who are looking to do less upkeep in their retirement years and spend a lot of time travelling, visiting grandchildren in other states, etc. townhomes and condos are extremely popular for retirees and empty nesters because they are smaller and the maintenance of the property is done for them. 

An insurance agent in Charlotte can help you with the other important considerations such as homeowners or renters insurance. 

Put Together a New Budget

You are not the same person you were when you were 20, 30, and even five years ago, so your spending habits have likely changed significantly as well. Retirement can be tricky because now you have a set amount to spend each month and need to figure out what to do with what you have coming in. 

Unless you get a second job or find a way to supplement your income, you are living with what you’ve got. You need to set up a new budget based on what you have. Remember to budget some fun stuff in there too, because there’s no reason not to live the life you always wanted. 

Finances are tricky throughout your whole life and this does not change just because your kids are out of the house and you are no longer paying for as many groceries you once were, and don’t have to budget out for lunch money anymore. 

These important tips for overcoming financial challenges after 50 can help you achieve your goals and live your retirement dreams.

Why Starting a Tax Preparation Business is the Best Way to Expand your Business

Due to the recent turns in the economic climate, many people are searching for additional revenue streams in order to maintain their current life-styles. In my own business we have lost revenue across the entirety of our business. 

It was time to look for additional ways to create revenue. We looked into professional tax preparation as a way to supplement earnings, pay the bills, and more.
A tax preparation business can be a stand-alone enterprise, or you might find it to be a complimentary small business that can be added to your company that you are currently associated with, such as personal financial services, insurance, accounting or bookkeeping services. Your customers will certainly appreciate having one person that can manage their financial resources

A tax preparation business is also great to get into if you happen to work in another business that is likewise seasonal but at a different time of the year, such as retail, lawn care, travel, etc. A tax preparation firm can provide you with a constant income year-round.

Professional Tax Prep Software

Most new tax preparation courses assume no previous tax knowledge and the tax preparer software available today makes tax preparation a lot easier. That being said, tax preparer software is NOT a replacement for tax knowledge. 

It's quite essential that you are able to complete an income tax return by hand. You should never depend on any tax software application to train you, do your thinking or to prepare an income tax return without you supervising the process. 

Having quality professional tax prep software will make you feel more empowered and capable of providing quality tax returns for your clients. There are companies that provide tax prep software like Sigma professional tax software. Be sure you choose one that stands behind their product and keeps it updated continuously.

Lets Take it Even Further

As the trusted tax consultant to your tax customers, you are in the position to provide them with the additional financial services they require. By obtaining the needed licenses, you can deliver financial services and products such as IRAs, retirement plans, insurance coverage, etc. You can pick from several trusted broker-dealers that specialize in aiding tax professionals to meet their customers' financial services needs.

You can additionally offer accounting and pay-roll services for your small business tax customers to produce additional year-round income. 

Countless small companies are started every day and the trend is accelerating because of the sizable number of displaced employees going to self-employment.

Other opportunities to create year-round revenue exist, like becoming a real-estate broker to take advantage of the recovery of the real estate market in the coming years. Income tax know-how is a great asset for many financial services professionals and having tax expertise will certainly provide you with a key competitive advantage.

It's Not All About The Numbers

It's remarkable the number of individuals that think tax preparing is everything about the numbers, but that's not all. Tax preparation is in fact a people business. So, if you enjoy helping people, you could do extremely well in the tax business. It has to do with building relationships and trust.

Yes, it is really important that you have the knowledge to prepare taxes properly. However the experience that your customer has throughout the tax preparation procedure and after is just as important. When you are taking care of a customer's financial personal information it ends up being very personal.

Your client trusts you to take excellent care of him/her and hopes that you have their best interests in mind. Your client is searching for guidance and has actually come to you because they see you as a professional in the tax business.

You might prepare a client's tax return perfectly however if they don't receive personal service from you, they may not be back. Relationships are very important!

I Lost My Boat Title — Now What?

When you want to transfer the ownership of your boat to someone else, perhaps the most important document that you need to have in hand is the vessel’s title. The title is a legal document stating who the rightful owner of the boat is. 

In the event that there is ever a dispute over who actually owns the boat the title serves as the primary form of evidence as to who is the owner.

Like many documents, boat titles have a tendency to get lost. Even responsible boat owners misplace their boat titles — they are misfiled, accidentally discarded, or slipped into boxes of “important papers” that are stored for years and never looked at again. 

This isn’t usually a big deal until you want to transfer your boat to a new owner via a sale or donation to a worthy organization. In that case, not having the title can turn into a slight headache but one that’s easily overcome.

Replacing a Lost Boat Title

In most cases, replacing a lost boat title is a relatively simple process. Depending on your state laws — not all states require boat titles — you can generally request a duplicate title from the appropriate issuing agency. 

In most states, this is the same department that registers motor vehicles, but a few states funnel boat registrations and titles through their department of parks and recreation. You can generally find the information for your state on the state website.

If your state requires a title on the boat, you can generally request a duplicate document by filling out the required form and paying the necessary fees, usually just a few dollars. Depending on the state, you may have to request the title in person, or you can do it over the phone or online. 

When the Boat Owner Is Deceased

When the owner of a boat dies, it’s common for his or her estate to either sell or donate the boat. 

If the title to the boat is included in the estate, the transfer process is relatively simple: Upon completion of the appropriate forms indicating that the seller has the authority to act on behalf of the state (the probate forms), the sale or transfer is completed much like any other. 

If the title to the boat is missing, the representative of the estate can request a duplicate, provided he or she has the appropriate probate forms in place. 

Coast Guard Documented Vessels

If the U.S. Coast Guard documents your boat, the title issue is a little more complex. Boats that are USCG registered are not titled, but instead the owners receive a Certificate of Documentation declaring ownership of the vessel. 

These CODs supersede any title; in other words if the COD information differs from that of a state-issued title, the COD information will be considered true and correct.

When you are attempting to transfer ownership of a Coast Guard-documented boat, and you have the COD in hand, you simply need to complete and sign the transfer of ownership section and have it notarized. 

However, if you do not have the COD, you will need to request a letter of deletion from the Coast Guard, indicating that you are no longer the owner of the vessel and that you have transferred the ownership to a specific person or entity. 

The Coast Guard requires that you submit a valid bill of sale or other documentation indicating that you have transferred ownership of the vessel to another party.
Non-Titling States

Currently, only 32 states plus the District of Columbia require boat owners to hold valid titles. The remaining states only require boats to be registered, which is usually accomplished by showing the bill of sale or transfer, as well as any other required documentation, such as proof of insurance. 

If you are transferring ownership of your boat from a non-titling state to one that requires titles, in most cases the new owner will only need proof of registration in order to register the boat in his or her name. 

If you are transferring ownership in a titling state, or between two titling states, then you will have to take the extra step of acquiring a duplicate title before the transaction can be completed.

Usually, when you donate your boat to a reputable organization, the organization’s representatives can help you determine the paperwork requirements and help you acquire the documents you need. 

So if you are missing the title to your boat, don’t let that stop you from selling or donating it — with some legwork you can make the transaction legal.