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Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

Visit houselogic.com for more articles like this.

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

Published: February 22, 2010

Preparing for tax return

From energy tax credits to vacation home deductions, check out these tax tips for homeowners looking ahead to 2010 returns.

Claim remaining energy tax credits

It’s time to get cracking if you didn’t exhaust your full allotment of residential energy tax credits during 2009. Although tax credits for big projects like residential wind turbines and solar energy systems have no upper limit and are good through 2016, energy tax credits capped at $1,500 expire at the end of 2010. Eligible capped projects include new windows and doors, insulation, roofing, water heaters, HVAC, and biomass stoves.

Here’s how it works with capped federal credits: You can earn energy tax credits worth 30% of the cost of qualifying improvements, but the total tax credits can’t exceed $1,500 combined for 2009 and 2010. So if you only took, say, $700 worth of capped energy credits on your 2009 tax return, you’re still due for another $800 in credits in 2010. Some projects include the cost of installation–a furnace, for example–while others, such as insulation, are limited to the cost of materials.

Max out tax benefits of a vacation home

Use a vacation home wisely, and it’ll provide a break from taxes as well as the hustle and bustle of everyday life. The rules on tax deductions for vacation homes can get a bit tricky, but understanding and adhering to them can yield many happy tax returns.

If your vacation home is truly a vacation home meant for your personal enjoyment, as opposed to a rental-only income property, you can usually deduct mortgage interest and real estate taxes, just as you would on your main home. You can even rent out the home for up to 14 days during the year without getting taxed on the rental income. Not bad.

Now, let’s say you want to rent out your vacation home for more than 14 days in 2010, but also use it yourself from time to time. To maximize the tax benefits, you need to keep tabs on how many days you use your vacation home. By restricting your annual personal use to fewer than 15 days (or 10% of total rental days, whichever is greater), you can treat your vacation home as a rental-only income property for tax purposes.

Why is that a big deal? In addition to mortgage interest and real estate taxes, rental-only income properties are eligible for a slew of other tax deductions for everything from utilities and condo fees to housecleaning and repairs. Deductions are limited once personal use exceeds 14 days (or 10% of total rental days), so get out your calendar now to strategically plot your vacations.

Take advantage of tax breaks for the military

In salute to members of the armed forces serving overseas who want to purchase a home, the IRS is extending a lucrative tax perk for military personnel. If you spent at least 90 days abroad performing qualified duty between Jan. 1, 2009, and April 30, 2010, you have an extra year to earn a homebuyer tax credit. In addition to uniformed service members, workers in the Foreign Service and in the intelligence community are eligible.

Thanks to this extension of the homebuyer tax credit, qualifying military personnel have until April 30, 2011, to sign a contract on a new home. The deal must close before July 1, 2011. Just like non-military buyers, first-time homebuyers can earn a tax credit worth up to $8,000, and longtime homeowners can earn a credit of up to $6,500. The same income restrictions and $800,000 cap on home prices apply.

Military personnel can also get a break if official duty calls and they’re forced to move for an extended period. Normally, the homebuyer tax credit needs to be repaid if you sell your home within three years, but this requirement is waived for uniformed service members, Foreign Service workers, and intelligence community personnel. The new extended duty posting doesn’t need to be overseas, but it must be at least 50 miles from your principal residence.

Challenge your real estate assessment

You can’t do much about the rate at which your home is taxed, but you can try to do something about how your home is valued for taxation purposes in 2010. The process varies depending where you live, but in general local governments conduct a periodic real estate assessment to determine how much your home is worth. That real estate assessment figure is used to calculate your property tax bill.

You can usually appeal your real estate assessment if you think it’s too high. Contact your local assessor’s office to find out the procedure, and be prepared to do some research. There’s often no charge to request a review of your assessment.

Look for errors. You probably received an assessment letter in the mail, and many local governments provide the information online as well. Make sure the number of bedrooms and bathrooms is accurate, and the lot size is correct. Also check the assessed value of comparable homes in your area. If they’re being assessed for less than your home, you might have a case for relief.

Even if your assessment is accurate and comparable homes are being taxed at the same rate, there might be another route to tax savings. Ask your assessor’s office about available property tax exemptions. Local governments often give breaks to seniors, veterans, and the disabled, among others.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Mike DeSenne is Online Managing Editor for taxes, finances, and insurance at HouseLogic.com, and the former Executive Editor of SmartMoney.com. He likes to do his taxes by hand, much to the dismay of his accountant.

Published: November 24, 2010

Steam washers step up as futuristic home appliances that won’t break your budget and just might make your iron obsolete.

Why steam?

• Partner in grime. Most steam washers utilize a combination of water and steam in a variety of cycles to do good things for your laundry. Essentially, steam boosts the temperature inside the washer drum, causing fibers to relax and more efficiently absorb water, releasing deep-down dirt and stains. Detergent dissolves quickly and works better in the higher temperatures, too, which also kill bacteria.

• Wrinkle reducer. Like Botox® for cloth fibers, the high-heat steam softens fabrics, which allows wrinkles, deeply embedded during spin cycles, to flatten out.

• Ahh-choo alleviator. High temperatures sanitize clothing and reduce allergens, such as dust mites and pet dander from the Jetsons’ dog, Astro.

Some steamy statistics

Earth-friendly attributes: Because a steam washer boosts cleaning power with steam, it requires less water to do the job. For example, one model uses 9 gallons less water per load than a traditional washing machine. The Jetsons family of four averages 400 loads of laundry per year, so that calculates to a whopping 3,600 fewer gallons of water used.

Using fewer gallons also means that less energy is required to heat the water. Some cycles are typically longer for a steam washer, so you may spend slightly more on electric costs than with a traditional washer, depending on the cycles used.

However, very rapid spin cycles can reduce time in the dryer, making up for some lost energy savings. Compare Energy Star ratings of the various models before you buy.

Price particulars: Depending on the number of cycles and other technology options, steam washers range in price from $545 to $1,900.

Three innovative models the Jetsons are considering:

• Samsung Model WF520 saves time by letting you wash more at once. The 5 cu. ft. capacity, for example, can hold 31 large bath towels. The washer applies steam to any one of seven wash cycles, including the StainAway cycle that eliminates the need to pre-treat stains. Retails for $1,599.

• LG Ultra-Capacity SteamWasher (WM3885HCCA) features a steam-enhanced Allergeine™ cycle that removes over 95% of household allergens from your laundry and is certified asthma- and allergy-friendly by the Asthma & Allergy Foundation of America. Retails for $1,889.

• Whirlpool WFW9750WW uses 77% less water and 81% less energy than a traditional washer. It can hold up to 18 pairs of jeans in a single load. The FanFresh option prevents odors in wet clothes for up to 10 hours with technology that circulates air in the washer, keeping clean clothes fresh and odor-free so you can wash now and dry later. Retails for $1,299 (in white).

As a devotee of improvements, products, and trends for the home and garden, Jan Soults Walker dreams of the day an appliance (or a REAL Rosie the Robot) folds and puts away the laundry. For 25 years she’s written for a number of national home shelter publications, and has authored 18 books on home improvement and decorating.

Published: November 18, 2009

Holiday Fire Safety Tips

The holiday season is one of the most dangerous times of the year for household fires, so take note of these tips to reduce your risk.

To keep your household from becoming a holiday fire statistic, here are some safety tips to follow:

Cooking

Cooking is the top cause of holiday fires, according to the USFA. The most common culprit is food that’s left unattended. It’s easy to get distracted; take a pot holder with you when you leave the kitchen as a reminder that you have something on the stove. Make sure to keep a kitchen fire extinguisher that’s rated for all types of fires, and check that smoke detectors are working.

If you’re planning to deep-fry your holiday turkey, do it outside, on a flat, level surface at least 10 feet from the house.

Candles

The incidence of candle fires is four times higher during December than during other months. According to the National Fire Protection Association, four of the five most dangerous days of the year for residential candle fires are Christmas/Christmas Eve and New Year’s/New Year’s Eve. (The fifth is Halloween.)

To reduce the danger, maintain about a foot of space between the candle and anything that can burn. Set candles on sturdy bases or cover with hurricane globes. Never leave flames unattended. Before bed, walk through each room to make sure candles are blown out. For atmosphere without worry, consider flameless LED candles.

Christmas trees

It takes less than 30 seconds for a dry tree to engulf a room in flames, according to the Building and Fire Research Laboratory of the National Institute for Standards and Technology. “They make turpentine out of pine trees,” notes Tom Olshanski, spokesman for the U.S. Fire Administration. “A Christmas tree is almost explosive when it goes.”

To minimize risk, buy a fresh tree with intact needles, get a fresh cut on the trunk, and water it every day. A well-watered tree is almost impossible to ignite. Keep the tree away from heat sources, such as a fireplace or radiator, and out of traffic patterns. If you’re using live garlands and other greenery, keep them at least three feet away from heating sources.

No matter how well the tree is watered, it will start to dry out after about four weeks, Olshanski says, so take it down after the holidays. Artificial trees don’t pose much of a fire hazard; just make sure yours is flame-retardant.

Decorative lights

Inspect light strings, and throw out any with frayed or cracked wires or broken sockets. When decorating, don’t run more than three strings of lights end to end. “Stacking the plugs is much safer when you’re using a large quantity of lights,” explains Brian L. Vogt, director of education for holiday lighting firm Christmas Décor. Extension cords should be in good condition and UL-rated for indoor or outdoor use. Check outdoor receptacles to make sure the ground fault interrupters don’t trip. If they trip repeatedly, Vogt says, that’s a sign that they need to be replaced.

When hanging lights outside, avoid using nails or staples, which can damage the wiring and increase the risk of a fire. Instead, use UL-rated clips or hangers. And take lights down within 90 days, says John Drengenberg, director of consumer safety for Underwriters Laboratories.  “If you leave them up all year round, squirrels chew on them and they get damaged by weather.”

Kids playing with matches

The number of blazes–and, tragically, the number of deaths–caused by children playing with fire goes up significantly during the holidays. From January through March, 13% of fire deaths are the result of children playing with fire, the USFA reports; in December, that percentage doubles. So keep matches and lighters out of kids’ reach. “We tend to underestimate the power of these tools,” says Meri-K Appy, president of the nonprofitHome Safety Council. “A match or lighter could be more deadly than a loaded gun in the hands of a small child.”

Fireplaces

Soot can harden on chimney walls as flammable creosote, so before the fireplace season begins, have your chimney inspected to see if it needs cleaning. Screen the fireplace to prevent embers from popping out onto the floor or carpet, and never use flammable liquids to start a fire in the fireplace. Only burn seasoned wood–no wrapping paper.

When cleaning out the fireplace, put embers in a metal container and set them outside to cool for 24 hours before disposal.

Pat Curry is a former senior editor at BUILDER, the official magazine of the National Association of Home Builders, and a frequent contributor to real estate and home-building publications.