For those of you who use your personal vehicle in your business you may want to read the information below regarding the changes in mileage deduction for 2011 and 2012.

photo credit: Dougtone

Mileage Rates for 2012

If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2012.

These mileage rates are used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. So when it comes to filing your taxes this time next year, you’ll need to know these numbers!

New for 2012

As of January 1, 2012, the standard mileage rates are as follows:

• Businesses = 55.5 cents per mile driven
• Medical or moving = 23 cents per mile driven
• Charitable organizations = 14 cents per mile driven

You’ll notice that the rate for business miles is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. However, the IRS is accepting public comments on this policy.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

photo credit: Rusty Clark

Almost daily laws are changing and programs are being created, from the Federal Government all the way down to local government agencies when it comes to distressed property owners who may have a claim against their lender due to unethical or criminal actions. In addition we are seeing new programs developed to aid homeowners who may qualify for mortgage relief assistance. There has been a lot of talk on the national level in regard to unethical behavior by some lenders who assisted home buyers at the peak of the market by loaning them money when they knew they could not qualify for the loan in a traditional manner. This whole arena will be debated for decades to come but in the meantime we as consumers must stay educated as well. Below is a link to the most frequently asked questions regarding the National Mortgage Settlement Program. Whether you are involved personally or not the information is good to know about.

http://oag.ca.gov/nationalmortgagesettlement/faqs#after

In case you missed this recent article in CNN Money, I thought it was more than news worthy. As a country of people there is a new found confidence and feeling of excitement coming back into our communities across the nation. For the first time in years I am feeling a sense of positive energy from people. Are we out of the woods completely? No. Are we headed in the right direction? Yes. The momentum is building so let’s keep it going. Enjoy the article.

Stocks pop after ‘monster’ jobs report

By CNNMoney staff @CNNMoneyMarkets February 3, 2012: 9:42 AM ET

NEW YORK (CNNMoney) — U.S. stocks rallied at the open Friday, as investors cheered a much stronger-than-expected report on January job growth. The Dow Jones industrial average (INDU) gained 112 points, or 0.9%, the S&P 500 (SPX) added 13 points, or 1%, and the Nasdaq composite (COMP) increased 28 points, or 1%. The rally was sparked by the Labor Department monthly jobs report, which showed that the U.S. economy added 243,000 jobs in January, far exceeding expectations. The unemployment rate dropped to 8.3%, the lowest since February 2009. Economists surveyed by CNNMoney had expected the Labor Department to report an increase of just 130,000 jobs in January. The unemployment rate was expected to rise to 8.6%. Economists had expected a slowdown in post-holiday hiring, considering that about 40,000 temporary couriers were hired for the holidays alone. The jobs data blew away market expectations,” noted Marc Chandler, global head of currency strategy at Brown Brothers Harriman, calling it a “monster” jobs report. “This coupled with other recent reports for January show the year has begun off on a firm note,” he added. Meanwhile, Investors will also remain on the lookout for an official agreement on a debt-reduction plan, and second bailout for Greece. The deal is expected to come by the end of the week, though deadlines have been missed in the past.  Reports are also due Friday on factory orders and the service sector. Also, a slew of corporate results came out on Thursday morning.

World markets: European stocks were higher in afternoon trading. Britain’s FTSE 100 (UKX) rose 1.2% while the DAX (DAX) in Germany jumped 1.3% and France’s CAC 40 (CAC40) rose 0.7%. Asian markets ended mixed. The Shanghai Composite (SHCOMP) rose 0.8%, while the Hang Seng (HSI) in Hong Kong was flat and Japan’s Nikkei (N225) slipped 0.5%. Economy: Factory orders for December are expected to have risen 1.5%, according to a survey of analysts by Briefing.com. The January installment of the ISM Services Index is expected to hit 53.1, up from 52.6 in the month prior. Currencies and commodities: The dollar rose against the euro, the British pound and the Japanese yen.  Oil for March delivery rose 65 cents to $97.01 a barrel.  Gold futures for April delivery fell $8.20 to $1,751.10 an ounce. Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.92% from 1.82% late Thursday.

The one thing we can be sure of is the world is in constant change when it comes to money and housing. Below are some new Fannie Mae and Freddie Mac fee increases that will be coming in April of this year. What I thought was interesting was the “why”.

photo credit: Sean MacEntee

Fee Increase to Impact Home Loans

In December 2011, Congress reached a last-minute deal to fund the payroll tax cut extension. The payroll tax extension will provide a 2% tax reduction for individuals making up to $106,800, so the tax extension will be very helpful for many Americans who are struggling during these tough economic times. But like so many things in our tangled economy, there’s a flip side. In this case, the tax cut deal has a rippling effect that will impact the mortgage world.

Here’s what’s happening and what it means to home loan rates:

What is happening and why? To put it bluntly, the passage of the payroll tax cut extension is being funded via a mandate to Fannie Mae and Freddie Mac (the nation’s largest providers of mortgage money) to increase their guarantee fees or “g-fee’s” by at least 10 basis points on the rate. So rather than giving a par rate of 4.00%, for example, the par rate is now increased by at least 10 basis points, or approximately 4.10%. But as you probably know…home loan rates are priced and offered in .125% increments, so this will most likely impact the consumer by .125% in rate. Whether you agree or not on the politics behind this cost being passed along to folks who are taking out mortgages, the Congressional Budget Office recently estimated that the increase will ultimately pay for about $35.7 Billion of the cost of the payroll tax extension.

What exactly is this “g-fee”? The guarantee fee or “g-fee” is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk…which means home loans can be offered at terrific interest rates to borrowers that have good – but not perfect – credit.

What exactly is the impact of the rate increase? For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front – but most folks will not do this.

Who will this impact? The change will impact all new borrowers of Fannie Mae and Freddie Mac loans. The bill will also impact Federal Housing Administration (FHA) loans by increasing the annual mortgage insurance premium that borrowers pay by one-tenth of a percent.

When will it start? Officially, the increase to guarantee fees will begin on April 1, 2012. However, the increase is already starting to be seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until April…and therefore will need the increased g-fee priced in earlier.

How long will this be in effect? The increase will be effective through October 1, 2021.

The bottom line is that the g-fees will be going up…and this will impact homebuyers looking to obtain a home loan through Fannie Mae, Freddie Mac and FHA.

1. Build your Emergency Fund.If the stock market and its volatility scare you, don’t just put your cash under your mattress, put it in an interest bearing high yield savings account and designate it your Emergency Fund. You will only earn ~0.8% on your cash, but it is better than the scraps you get at your traditional bank or nothing in your brokerage account. You’ll be happier when you see the balance grow this year. In fact, a recent study quoted in Money Magazine says that having an Emergency Fund brings people more financial satisfaction that paying off credit card debt or even owning a home.
2. Make the most of your living space.  For homeowner’s under the age of 35, home equity has collapsed an astounding 51%. Those over 35 years old have it better but have still seen 21% of their home equity vanish. If you are planning to stay put in your home, concentrate on making your space work for you instead of feeling a victim to the housing market. Three things will make your space feel new: clean up, repaint and add some lipstick. First, de-clutter your closets and either donate your goods (tax deduction!) or sell them on craigslist. One man’s trash is another man’s treasure and you could make some cash to pay for a quick home facelift. Second, paint is the least expensive way to give your home a new look. Third, lipstick= something pretty to dress things up. Perhaps an area rug, lighting or new throw to match the new paint job.
3. Give away money.  Givers are 43% more likely than non-givers to say they are happy about their lives. Most charities are set up to take credit card payments and debit you monthly. Don’t wait until the end of the year to donate your dough. Put it on autopilot and be happier for it.

Every year the National Association of Realtors gathers data to compare trends in the overall housing market throughout the United States. Below are a few of the trends for 2011. While I enjoy looking at historical data I believe 2012 will again offer new trends that we have not experienced for some time. Property appreciation, fewer distressed sales, more move up Buyers, and an a little more flexibility in the loan qualifying process. I guess we will have to wait until next year to see if I was right or not – Enjoy a wonderful 2012.

Housing News: 11 Trends from 2011

The National Association of Realtors® surveys homebuyers and sellers each year to uncover housing trends and monitor changes taking place in the industry. This year’s report highlights a number of trends that haven’t been seen in years. Here are just 11 highlights from the 2011 report.

1. In 2011, 37% of homebuyers were first-time buyers – which was down from 50% in 2010.

photo credit: akeg

2. Last year, 88% of homebuyers used the Internet to search for a home. That number was down slightly from a high of 90% in 2009. 

3. The typical homebuyer searched for 12 weeks and viewed 12 homes.

4. The number of buyers who purchased their home through a real estate agent or broker climbed to 89% – a share that has steadily increased from 69% in 2001.

5. Nearly 1 out of 4 buyers said the application and approval process was “somewhat more difficult” than expected…and 16% reported it was “much more difficult” than expected.

6. About half of home sellers traded up to a larger and more expensive home…and 60% traded up to a new home.

7. The top 3 factors influencing neighborhood choice were: the quality of the neighborhood, the convenience to job, and the overall affordability of homes.

8. The typical seller lived in their home for 9 years. That number has increased from 6 years in 2007.

9. Although 61% of sellers said they reduced their asking price at least once, the average home sold for 95% of the listing price.

10. Only 10% of sellers sold their homes without the assistance of a real estate agent. Of those people, 40% knew the buyer prior to the sale.

11. The typical “for sale by owner” home sold for $150,000 compared to $215,000 for the average agent-assisted home sale.

All Contents ©2012 The National Association of Realtors®.

Below are some excerpts from a recent New York Times article that I wanted to comment on since many hard working families have ruined their credit and lost their homes over the last few years. We could all write a book on why this happened but I think it is important to understand that a good credit history can be reestablished. It takes time and planning but for many Americans who lost their homes over the last 3 to 5 years, who have been diligent about their finances and credit, are in a position to purchase a home again in 2012. This means more family, neighborhood, and economic stability for all of us. The old saying “Time heals all wounds” is true when it comes to rebuilding your credit so my advice to you is, if you haven’t already started, start today.

photo credit: WDanRoberts

The New York Times

A good rental history can help borrowers

First-time home buyers planning to purchase a house later this year may have a better chance of qualifying for a mortgage if they have had a history of paying their rent on time.

Making sense of the story

photo credit: 401K

• Last year, credit-reporting agency Experian added a section to millions of credit reports showing on-time rent payments and raised the credit scores of many people. The company said that this year it would add in negative marks, including mentions of bounced checks or of tenants’ leaving before a lease was up.

• Incorporating rental payments into credit scores could affect millions of people who have not established credit histories through credit cards, student loan repayments, and other credit sources.

• Almost half of consumers considered “high-risk” experienced an increase of 100 points or more after their positive rental history was added, according to Experian’s rent bureau. Those with average or higher scores did not experience major movement.

• Although it is still too early to show the effects of the new credit report, which began in December, the changes are intended to allow lenders and consumers to have greater transparency, according to Corelogic.

• People who have lost their homes to foreclosure and are now leasing may be able to rebuild their credit histories by being responsible renters.

• However, consumer groups and advocates are skeptical, noting that reports are sometimes riddled with mistakes and some landlord-tenant disputes may be difficult to capture in a credit report. Rent may not have been paid, for example, because the furnace was left unrepaired for months.

In today’s fast paced world where few are speaking the verbal word and most are either emailing, texting or tweeting I thought it would be fun to review ten simple rules that were sent to me recently that would benefit both the sender and the receiver when it comes to email.

1. Organize and Prioritize. Create prioritized folders with a labeling system that makes sense to you. Customize folders for “Reply ASAP,” “To Do,” “Friends,” etc. Searching for buried email is a time waster, so shift messages to their respective folders as soon as you open your inbox.

2. Act Now. More often than not, your clients have come to expect a response within 24 hours, and preferably within the same working day. The first time you see an email, respond immediately, delete it, set it as a task to accomplish at a specific time, or move it into the appropriate folder.

3. Bridge the Gap. You can’t always get back to every sender with the information they want immediately, but make sure they know you’re not ignoring them. Send a short note explaining you’ve received and read their email, and you’ll need to get back to them about it later. The simple act of acknowledging their message will most often encourage patience, and can make all the difference between a positive and negative impression.

4. Keep it Short. Try to keep your responses as concise and to-the-point as possible. Summarize requests so they understand your response in context. For example: “You asked if we could meet Wednesday at 4, but I won’t be available until 5:30 that day. If that won’t work for you, please let me know how Thursday morning looks.”

5. Structure Your Message. Use short paragraphs and include blank lines between each one. This layout is easier to read, and will make your message more approachable.

6. Proof It. Using a spell checker is important, but it might not catch everything. Typos and errors can form other valid words (e.g. contact vs. contract) that may not be corrected, so be sure to reread your message before sending it. And keep in mind that some phrases or thoughts might get lost in translation. Sarcasm, irony, and humor are often misinterpreted via email, so make sure your meaning is clear.

7. Create a Personalized Signature. More than likely, you send out quite a few emails daily and many of those may be forwarded to other recipients. Use each message to market you and your listings by simply including a link to your website, blog, or social networks in your email signature.

8. Exercise Email Etiquette. Greet your recipient by name (Hello, Ryan) and close with your name on its own line (Regards, Joan). It only takes a few seconds, but can change the tone of your message and establish a certain level of respect. AVOID USING ALL UPPERCASE LETTERS, it may be interpreted as shouting. Don’t send unsolicited attachments, as many users have become wary of potential computer viruses. Get permission before sending large files, as they can tie up the recipient’s mail while being downloaded. Use acronyms (BTW, LOL) and emoticons sparingly.

9. When in Doubt, Send Plain Text. Using special characters (bullets, ampersands), images, fonts, and colors, runs the risk that your recipient might not be able to view your message properly.

10. Stay in Touch. Having a client or prospect in your database isn’t worth much if you don’t communicate with them. Send your contacts periodic updates on the market in their area, tips on home buying and selling, and even personal notes on birthdays and anniversaries.

Take a few minutes to view this news piece.

Wow, what a great solution to our economic woes!

Click here to view the embedded video.

I was just thinking about the holidays and how I could give a gift in a different way this year when I came across the article below. If you are looking to add value to your gift giving this year think about the resource below as a possibility. Happy Holidays!!

Give the Gift of Charity this Holiday Season!

It’s a Snap with THE GOOD CARD^® – a Gift Card for Charity

Network for Good has a fresh angle on gifting this holiday season: The Good Card^® - a gift card for charity – is perfect for everyone on your list. Good Cards have a stored value that can be redeemed as a donation to any of more than 1.2 million charities based in the US. Good Cards can be distributed via email or physical mail, or can be private labeled to meet your brand needs. Learn more at Network for Good.

A gift card for charity is an ideal reward for employees or thank you gift for customers and vendors that links their passion for a cause to your company’s brand. A new study by researchers from Harvard Business School, the University of British Columbia and the University of Liege that was recently highlighted in the Washington Post confirms that a bonus employees get to spend on others is more motivating than a bonus they get to spend on themselves. A Good Card recipient can redeem their gift card as a donation to any of more than a million nonprofits, an easy way for employees to share their personal rewards with others.

Good Card purchases, including fees, are tax-deductible to your company and are a creative way to spend funds earmarked for philanthropy. In addition, because Good Card purchases are charitable donations, they do not fall under the IRS gift limit or policies around corporate gifts with cash value. Network for Good’s charity gift card program is turn-key, customizable and easy to implement – even at the last minute. The program is recommended for any company looking to put a special spin on their gift-giving this year. What’s more, the person GIVING the gift (i.e., the card purchaser) gets the benefit of a tax advantage for charitable donations as well.

The Good Card is a creative and constructive way to honor partners and prospects, friends and neighbors during the holiday season and throughout the year. Visit Network for Good for more details.