It seems like a no-brainer to deduct your home-office expenses at tax time, but how big of a deduction do you take? Victoria Gillespie, national director of business development for REALTORS® Federal Credit Union, a Division of Northwest Federal Credit Union, has a useful rule of thumb: if your home office takes up 30 percent of your house, then deduct your household expenses at that same rate. That means deducting 30 percent of your mortgage payment, utility costs, and so on. Of course, any tax-deduction decision you make should be done in consultation with an attorney or tax advisor. But Gillespie’s rule gives you something to take to the professionals to see what they say.
Gillespie, who has 20 years of banking and investment experience, says incomplete record keeping is the number one reason real estate professionals and other independent contractors don’t take all of the deductions that are available to them. As you can see, correcting that deficiency opens the door for saving a lot of money on your annual tax bill. But how do you know what records to keep? Gillespie suggests you act as if you’re going to be audited tomorrow and keep those records you need to create a clear audit path for all of your deductions.
These and Gillespie’s other tips are intended to help you, as an independent contractor, prepare for your taxes all year long. That way, when tax time comes, you have the money set aside to pay your tax bill, and the taxes you pay are the smallest amount, based on your use of all the deductions and other benefits open to you.
You can get these and other ideas on managing your tax liability in this five-minute video, which REALTOR® Magazine produced in cooperation with REALTORS® Federal Credit Union. In the video, Gillespie talks about being smart about taxes. It’s the first in a series on managing your money as an independent contractor. The next video will look at the up and down nature of your income. Look for that in another month.
Go to second video in series, which looks at setting aside 20 percent for reserves.
Looking for more? Check out this video outlining five tech tools that can help you manage your finances.
The media is a powerful tool for telling your business story, but you have to use it wisely. At the National Association of REALTORS®’ Leadership Summit in Chicago on Tuesday, Don Cunningham, managing director of global PR firm Burson-Marsteller, talked about how real estate practitioners can hone their messages and stay on point during media interviews.
“Stick to your story,” Cunningham told hundreds of REALTORS® attending the summit. “You have to be of the mind-set that I’m going to continue to talk about what I came here to talk about.” Reporters will try to steer you off course into other subjects that you may have not been prepared to talk about, he warned. Here’s Cunningham’s game plan for successfully navigating an interview: Continue reading »
When Michele Serro, an opera singer with a background in design, had a lackluster experience purchasing her first apartment in New York five years ago, her life mission became clear: Make home-buying human.
“I didn’t feel like there were a lot of resources for first-time home buyers,” Serro said. So she entrenched herself in all things real estate, and harnessed her design skills to create a clean, well-organized online portal that serves up information in the form of digestible articles, easy-to-follow lists, and fascinating infographics.
Whether it’s explaining common mortgage types, offering money-saving tips, or guiding visitors with an all-encompassing home-buying checklist, Doorsteps.com gives users free, step-by-step educational tools that are actually fun to read.
But what really sets Doorsteps apart from other real estate Web sites is that it makes the real estate agent the consumer’s guide.
Doorsteps works like this: The real estate pro signs up and invites an unlimited number of buyers to register at the site. It’s $25/month for the agent and free for the client. As the site walks its users through the home-buying process, member agents can see the same information their clients see and interact with them, answering their questions at each step along the way. It’s perfect for those people you meet who are interested in buying someday but aren’t quite prepared to start looking at houses.
“We designed this as an agent tool from the buyer’s point of view,” Serro explained. “Our plan is to create the best possible experience for buyers, answer all of their questions, and make dynamic content that also benefits agents.” Continue reading »
Realtor.com® President Errol Samuelson reassured REALTORS® and REALTOR® association executives on Thursday that impending changes to the site — including the expansion of its database to include listings from sources other than REALTORS® — will strengthen the REALTOR® brand. Samuelson joined NAR CEO Dale Stinton and 2013 President Gary Thomas in a webinar to further explain the changes. Samuelson and NAR have been fielding questions since the NAR board’s recommendation July 24 to include unlisted new homes and rentals, as well as listings from entities that are not REALTOR®-owned and controlled and from practitioners who are not REALTORS®.
The move has been widely praised in tech circles, though some REALTORS® have questioned whether it’s a “betrayal” of the REALTOR® brand. Samuelson responded in the session and reiterated in a commentary published by Inman News on Friday that it’s actually “an act of profound fidelity to the brand.” Continue reading »
“New normal” is a phrase we’ve become familiar with in this post-bubble real estate industry. It describes the current landscape of home prices that are lower than their peak but still healthy and steadily rising, stricter lending standards, and continued low (albeit slightly rising) interest rates.
But if you think about it, the term “new normal” really just connotes a recent change. I should know, I just had a baby five months ago – believe me, I’m living in a new normal.
So I’d like to point out another new normal: the situation of the Millennial generation.
I’m sure you’ve read reports saying that many young adults are putting off buying a house because they’re strapped with college loan debt (which, the New York Times aptly points out, is due to rising tuition costs outpacing income levels, among other reasons). More Millennials are returning to their parents’ homes after college to save money. They’re delaying both marriage and starting a family. Many of them are still trying to decide if they ever want to get married and/or have children.
But what else do we know about Gen Y?
Yes, they have higher student loan debt than previous generations, but they’re also more highly educated. According to the U.S. Bureau of Labor Statistics, 66.2 percent of 2012 high school graduates are enrolled in colleges or universities (71.3 percent of young women and 61.3 percent of young men), as compared to 61.7 percent of grads who went to college in 1992 and 49.2 percent 40 years ago. More are seeking higher post-graduate degrees as well. And overall, Gen Y has less debt from material items than older generations, shying away from credit cards and fancy cars.
There’s also one more thing we know about Millennials: They love houses — or at least the idea of a owning a home of their own. Continue reading »
President Barack Obama reiterated his view that a recovering housing market is essential to an improving U.S. economy in an online forum Wednesday where consumers grilled the president on his housing plans.
“Homeownership is a quintessential element of the American dream,” Obama said. “Keeping the overall economy moving in the right direction means that there’s a stronger market for homes.”
The 30-minute event, moderated by Zillow CEO Spencer Rascoff, was live-streamed on the White House’s Web site. Zillow fielded housing questions from consumers ahead of time via social media and selected a handful to present to Obama at the forum.
The questions covered topics such as the Home Affordable Refinance Program, Fannie Mae and Freddie Mac, home affordability, and the effects of student loan debt on housing. Continue reading »