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Following Severe Weather, HUD Releases Disaster-Proofing Guide

March 6, 2012 3:58 am

Newport Partners, LLC, a Maryland-based consulting firm, recently announced the initial results of a U.S. Department of Housing and Urban Development-funded research project, “Safer, Stronger Homes: Protecting Your Risk During a Natural Disaster.” The how-to guide outlines simple, low-cost mitigation strategies for both builders and homebuyers alike to improve their home performance during natural disasters.

"Local building codes have improved dramatically over the past two decades, but as we witnessed recently with severe weather patterns, they cannot address everything that might go wrong in a home," said Jay Crandell, ARES Consulting and part of the Newport Partners project team. "This disaster-proofing guide will help builders and homebuyers fill some of the gaps by addressing known failures not typically addressed by code."

The strategies were highlighted at the National Association of Home Builders (NAHB) Codes and Standards Committee during the 2012 International Builders Show in Orlando.

Working with an expert advisory committee comprised of builders, engineers and code officials with direct experience with homes in natural disasters, the group identified 14 strategies that offer big payback for minimal investment, like better nailing patterns that can save homeowners thousands in damages.

The guide addresses four main disaster risks; winds, seismic forces, floods, and wind-driven rain that account for billions of dollars in home damage each year. The individual strategies are:
  • Wind-resistant roof configurations
  • Enhanced roof sheathing attachment
  • Wind and water-resistant roofing underlayment
  • Wind-resistant roof coverings
  • Improved gable overhang framing
  • Reinforced gable end wall construction
  • Improved siding and other exterior wall finishes
  • Enhanced wind pressure and rain-resistant window and door components
  • Roof ventilation practices to prevent wind-driven rain penetration
  • Enhanced water-resistive barrier and flashing practices
  • Reinforced continuous load path
  • Earthquake and wind-resistant chimneys
  • Extra-elevated foundations
  • Prevention of tree-fall damage with wind-resistant landscaping
For more information on the specific benefit and costs of the disaster mitigation strategies, and additional resources, please visit

Published with permission from RISMedia.


Tax Alert for Home Businesses

March 5, 2012 9:58 am

Home-based businesses are an area in which even well-intentioned taxpayers can easily run afoul of the IRS.

Every home-based business, no matter how small, must file a tax return. Even if you are not dependent on your home-based business to make ends meet, see it as a sideline, a part-time job or a hobby, IRS considers you self-employed and expects you to file a return that reflects that status.

"Sole proprietors file their usual Form 1040 to report their W-2s, interest, capital gains, etc.," explains Sherrill Trovato, EA, USTCP, an enrolled agent in Fountain Valley, Calif. "They report their business income on Schedule C and will calculate any self-employment tax on Schedule SE. If they deduct expenses for an office in their home, they will also file Form 8829 to report the business percentage of their property taxes, mortgage interest, utilities and insurance, among other items."

If you use a portion of your home for business, consider whether or not you qualify for the home office deduction. The general rule is that to take the home office deduction you must regularly and exclusively use part of your home either as your principal place of business, or to meet with customers, patients or clients there. The amount you can deduct depends on the percentage of your home used for business.
Hobby income can be tricky. IRS considers income from your hobby to be other taxable income, unless it has consistently been profitable over the past few years. After three years in the black, IRS says it's a business and you must report it as self-employment income. Hobby losses can be claimed as a deduction up to the amount you are claiming as taxable income.

Make sure to deduct all the costs of running your business – those are legitimate deductions that you don't want to miss! Form 4562 is used by small business owners to claim deductions for depreciation and amortization. And importantly, if you are making a profit, don't forget you owe quarterly payments to cover your income, Social Security and self-employment taxes. Many taxpayers with home businesses on the side are used to having their taxes withheld by an employer and are unaware that failing to pay quarterly taxes on profits can cost them more in late filing penalties.

Good record keeping is essential for small business owners, so throughout the year be sure to save receipts you may need to substantiate information on your tax return. And because owning a home-based business adds a new level of complexity to filing your taxes, you may want to consider consulting a licensed tax preparer. A tax expert can strategize with you each year and help you minimize your tax burden by taking advantages of all the tax options available to home-based businesses.

Published with permission from RISMedia.


Home Builders Announce Housing Finance System Reform Plan

March 5, 2012 3:58 am

The National Association of Home Builders (NAHB) recently announced a new comprehensive framework for housing finance system reform that would transition Fannie Mae and Freddie Mac to a new mortgage securitization system for single-family and multifamily conventional mortgages.

“Our plan seeks to overhaul the housing finance system to ensure that housing credit is available and affordable in the future and is delivered through a competitive, efficient, sound, safe and stable system,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.

To achieve this goal, Rutenberg said the system must include private, federal and state sources of housing capital; offer a reasonable menu of sound mortgage products for both single-family and multifamily housing that is governed by prudent underwriting standards and adequate oversight and regulation; and provide a federal backstop to ensure that 30-year, fixed-rate mortgages are available at reasonable interest rates and terms.

Replacing Fannie Mae and Freddie Mac with a new securitization system for conventional mortgages backed by private capital and a privately funded federal mortgage-backed securities fund must be done in an orderly fashion over time. During this phase-in period, Fannie Mae and Freddie Mac would remain operational until the alternative system is fully functioning.

Under this scenario, Fannie Mae and Freddie Mac would be gradually replaced by private housing finance entities (HFEs) that would be chartered to purchase single-family and multifamily mortgages from loan originators and package the loans into securities for sale to investors worldwide. The federal government would guarantee the securities, not the mortgages.

The HFEs would only purchase mortgages that are well understood and have reasonable risk characteristics, such as standard 30-year fixed-rate loans. The HFEs would operate under the oversight of a strong independent regulatory agency to ensure all aspects of safety and soundness. NAHB believes the 12 regional Federal Home Loan Banks could serve as HFEs.

Federal support to the conventional mortgage of the future would consist of a privately funded insurance fund where the government would guarantee its solvency in a manner similar to the Federal Deposit Insurance Corporation’s backing of the fund that insures savings deposits. Under this system, mortgage originators would pay premiums to capitalize the insurance fund, which would cover losses and ensure full payment to investors. The federal government would be required to pay investors only if the insurance fund was depleted.

NAHB’s housing finance reform blueprint also proposes to:

• Restart a carefully regulated fully private mortgage-backed securities system. NAHB believes reforms are needed in the system for rating mortgage-backed securities and is supporting the development of new securities ratings agencies that would use criteria developed by securities investors to assure objective evaluations and avoid conflicts of interest.

• Continue the role of the federal government housing agencies. The housing finance support roles of the Department of Housing and Urban Development, Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Government National Mortgage Association (Ginnie Mae) would be preserved.

• Enhance the position of state and local housing finance agencies (HFAs) as a source of housing funds. The HFAs should have a more prominent housing finance role through the development of original programs for new homes and multifamily rental units involving partnering with federal and private providers of housing capital.

• Expand the role of the Federal Home Loan Banks (FHLBanks) in the housing finance system. The FHLBanks should continue their current activities to serve as an ongoing liquidity source for institutions providing housing credit. Existing programs, such as the FHLBanks’ mortgage purchase programs, should be enhanced by allowing the banks to move beyond portfolio purchases to securitization.

• Repair flaws that produced the housing boom and bust. It is extremely important to continue and complete steps to close the gaps in standards and oversight that allowed and facilitated the improper and illegal activities in financial and mortgage markets. This should be done by undertaking a series of comprehensive reforms to ensure sound mortgage products and prudent underwriting; requiring sound mortgage securities structures and full transparency for investors; and imposing adequate oversight on previously unregulated segments of the mortgage and financial markets.

Published with permission from RISMedia.


Sustained Disposable Income Growth Needed to Keep Economic Recovery on Track

March 5, 2012 3:58 am

In the most recent issue of the “Lookout Report” - a biweekly research note from S&P Capital IQ's Global Market Intelligence (GMI) unit - analysts observe that more than any other single factor, the U.S. economy now requires sustained disposable income growth, coming from some combination of wage growth and tax policy, if the recovery is to remain on track and avoid recession. GMI Research has been closely following the U.S. employment situation and is monitoring discretionary consumer spending for signs of stress should retail gasoline prices exceed $4.00 per gallon.

Other findings from the report include:
• Overall, analysts in North America expect the S&P 500 Index to report very low growth of 0.82% in the first quarter of 2012, with a forecast of 3.26% growth for the consumer discretionary sector and 2.38% for the consumer staples sector.

• The dramatic increase in Apple's share price has generated interest in the latest of a long and fairly infrequent string of S&P 500 market capitalization leadership changes. Apple is the 11th issue to hold market capitalization leadership since 1926

• As the eurozone continues to struggle with its debt crisis, default risk, though moderating, remains built in to credit default swap (CDS) spreads for many of those sovereigns. But the risk premium in the five-year CDS for the U.S. has declined to levels not seen since mid-2010, which we think reflects the credit market's confidence in the U.S. economy.

• IPO activity increased in February as 17 offerings, excluding REITs and closed-end funds, were priced, raising $1.46 billion. Given the abundance of IPOs in the month, those recently priced issues found themselves among the performance leaders so far this year. Private equity-backed industrial machinery company Proto Labs Inc. now ranks as the top gainer among the early crop of 2012 IPOs, according to S&P Capital IQ.

• Commodity market performance and spiking petroleum prices in February have sparked uncertainty about early 2012 optimism as potential economic implications remain unclear. Industrial metals remained the best performing sector at the end of February, but petroleum prices have rallied, reintroducing geopolitical risk into the marketplace.

Published with permission from RISMedia.


Three Tax Tips for Newlyweds

March 2, 2012 3:54 am

Like many life events, beginning a married life brings many exciting changes. Perhaps not as exciting, but equally important, is your new tax filing status.

"Newlyweds and married taxpayers can choose to file jointly or separately based on their individual situation, but keep in mind that this filing status can change each year," says Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "Generally, using the 'married filing jointly' status provides the lowest tax liability and the highest standard deduction. However, if one of the filers has large deductions or expenses, the 'married filing separately' status may be more beneficial."

Steber reminds newlywed couples filing for the first time to keep the following in mind:
  • The Internal Revenue Service recognizes a couple's marital status on the last day of the year. Even couples who wed right before midnight on December 31 are considered legally married for the full 2011 tax year.
  • Couples should note that certain credits, including the Child and Dependent Care Credit, the Earned Income Tax Credit and certain education credits, are not available under the "married filing separately" status.
  • Tying the knot often results in a new last name. Names listed in your tax return should match all forms of identification, including social security card, passport, driver's license and documents from employers, loan holders and investment accounts.

Published with permission from RISMedia.


What Does Your Home Say About You?

March 2, 2012 3:54 am

According to a recent survey, more than 7 in 10 homeowners (71 percent) believe the outward appearance of their home reflects their personality. Those people who identify their personalities closest to their home’s exterior live in the Midwest, while those with the least connection are residents of the Northeast.

The information gathered in the 2011 DaVinci Roofscapes’ Homeowners Exterior Preferences Study - a nationwide consumer study, conducted online by Harris Interactive© - reports that homeowners who closely align their home’s exterior with their own personality cited a variety of reasons for the similarity, including:
  • “It’s bold and different like me.”
  • “Having personally designed my home, I feel it reflects my likes and preferences.”
  • “I am a contemporary person; the house is contemporary.”
  • “It too is old, but really stylish.”
  • “It looks simple and unpretentious … which is how I think of myself.”
  • “The exterior of my home is conservative in appearance, which is the same as my personality.”
Homeowners also indicated in the study that the colors of their home’s exterior match up
and reflect their personalities, citing:
  • “I am a traditionalist. I think the colors of my house are very traditional.”
  • “The (house) color and trim was chosen by me and is unique to my personality.”
  • “I have chosen colors (for my home’s exterior) that are traditional and dramatic rather than the drab beige people consider safe.”
DaVinci attributes the increased sales of its personalized color configurations and color blends to this relationship between homeowners’ personalities and their home exteriors. The study also indicated that when house hunting or designing a home, the most attention-grabbing feature of the exterior was the style of the home, followed by how the home looked on the property. This means that opposed to buying a house simply because it’s a good deal or in a good location, people seek out the style of home that most reflects how they view themselves and want others to see them.

Published with permission from RISMedia.


Make Your Home More Eco-Friendly

March 2, 2012 3:54 am

There are many ways to take your green efforts at home beyond recycling and replacing light bulbs. The following suggestions from offer homeowners and renters more ways to be environmentally friendly around the house.

  • Find out if your local utility company offers green power using the EPA Green Power locator. Clean energy options include highly efficient combined heat and power, as well as renewable energy sources. It will typically cost you a few more cents per kilowatt hour but that can be offset by energy efficient appliances.
  • The energy used in the average house is responsible for twice as many greenhouse gas emissions as the average car. One of the biggest sources of this energy usage is heating and cooling. Take steps to insulate and air-seal your home as much as possible. Also, replace older equipment and appliances with Energy Star qualified options. Energy Star products have met strict standards for energy efficiency without sacrificing performance and will save you at least 30 percent on energy costs while using significantly less natural resources.
  • Consider installing a WaterSense labeled showerhead to save more than 2,300 gallons of water per year for the average household, and simultaneously reduce energy demands on water heaters. If every household in the U.S. installed WaterSense labeled showerheads, more than 250 billion gallons of water would be saved per year, which could supply more than 2.5 million homes with water needs for a year.
  • Thirty percent of the food produced worldwide is never eaten, and the energy and water used to produce it is lost forever. Shop for only grocery items that you know you will use and opt for locally grown fresh foods. And, consider this: According to Environmental Defense, if every American replaced one meal of chicken per week with a vegetarian option, the carbon dioxide savings would be equal to taking more than half a million cars off the road. Skip meat a few times a week to make a major impact.
  • Don’t stop recycling – since 1990 we have increased the amount of waste recycled from 15 percent to 34 percent. In 2010, we recycled 85 million tons of waste, the energy savings equivalent of nearly 230 million barrels of oil.

Published with permission from RISMedia.


EPA Proposal Could Trigger Rising AC Costs

March 1, 2012 3:52 am

The National Home Service Contract Association (NHSCA) is advising consumers of a possible spike in the cost of maintaining older home air conditioning systems due to a recent proposal by the Environmental Protection Agency (EPA).

On January 1, 2010, the EPA placed a ban on the manufacture of new air conditioners using R-22, a refrigerant more commonly known as Freon® because of its ozone depleting effects. The use of R-22 was not banned, but rather allowances were dictated on its future manufacture and distribution in order to service existing home air conditioners.

Some air conditioner manufacturers responded by manufacturing “replacement” units designed to be Freon compatible. They are shipped with a “dry” charge, such as Helium or Nitrogen, but allow for the use of Freon at a later time. Consequently, demand for Freon remains high.

On January 4, 2012, the EPA proposed a rule which, if adopted, would significantly reduce production and distribution of Freon by approximately 50 percent. This has significantly increased, even doubled or higher, the price of Freon in recent weeks.

Home service contracts generally provide service, repair or replacement for items such as dishwashers, ovens, disposers, electrical and plumbing systems - and most importantly, heating, ventilation and air conditioning systems (HVAC). Many home service contract providers also offer a menu of optional items such as pool and spa equipment, well pumps, and free standing appliances such as refrigerators and clothing washers and dryers for an additional fee. Contracts do not cover pre-existing conditions, but will provide service, repair or replacement for failures arising due to normal wear and tear during the contract period.

Published with permission from RISMedia.


The Conference Board Consumer Confidence Index Increases

March 1, 2012 3:52 am

The Conference Board Consumer Confidence Index®, which had decreased in January, increased in February. The Index now stands at 70.8 (1985=100), up from 61.5 in January. The Present Situation Index increased to 45.0 from 38.8. The Expectations Index rose to 88.0 from 76.7 in January.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 15.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer confidence, which had declined last month, posted a sizeable improvement in February. The Index is now close to levels last seen a year ago (Feb. 2011, 72.0.). Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects, and their financial situation."

Consumers' assessment of current conditions was more favorable in February. Those claiming business conditions are "good" increased slightly to 13.3 percent from 13.2 percent, while those claiming business conditions are "bad" decreased to 31.2 percent from 38.3 percent. Consumers' appraisal of the labor market was also less pessimistic. Those stating jobs are "plentiful" increased to 6.6 percent from 6.2 percent, while those saying jobs are "hard to get" decreased to 38.7 percent from 43.3 percent.

Consumers were more optimistic about the short-term outlook than they were last month. The proportion of consumers expecting business conditions to improve over the next six months increased to 18.7 percent from 16.7 percent, while those anticipating business conditions will worsen decreased to 11.8 percent from 14.6 percent. Consumers' outlook for the labor market was also more upbeat. Those anticipating more jobs in the months ahead increased to 18.7 percent from 16.4 percent, while those anticipating fewer jobs declined to 16.9 percent from 19.1 percent. The proportion of consumers expecting an increase in their incomes improved to 15.4 percent from 13.8 percent.

Source: The Conference Board Consumer Confidence Survey®, February 2012

Published with permission from RISMedia.


Survey: Nearly One-in-Ten Adults Overlook Tax Deductions

March 1, 2012 3:52 am

With tax season in full swing, a new survey reveals that many Americans miss money-saving opportunities when filing their taxes. Nearly one-in-ten (8 percent) U.S. adults said they aren't aware that deductions can be made on their tax returns. In addition, of those eligible for deductions, almost two-in-five (37 percent) report they will not or are not sure if they will claim multiple deductions on their income tax return this year.

The survey was conducted online within the United States by Harris Interactive on behalf of CouponCabin among 2,550 U.S. adults ages 18 and older.

Missing deduction opportunities could be a result of the large number of U.S. adults who plan to prepare their income taxes without the help of a certified professional. Nearly half (45 percent) said they will prepare their taxes this year by themselves, using online resources, computer software or good old-fashioned pen and paper. More than one-third (38 percent) said they plan to use an accountant or tax professional to file their taxes.

While some aren't aware of deduction options on their tax returns, others aren't paying close attention to the calendar. One-in-ten (10 percent) of those who have ever filed income taxes said they have missed the deadline to file income taxes in the past, a mistake that can result in penalties from the IRS.

Paying attention to tax parameters is essential for an accurate and timely refund, but there are other ways to ensure you're saving as much money as possible. CouponCabin offers the following tips for saving money on this year’s taxes:
  • All in the family: Fourteen percent of U.S. adults said they plan to ask a friend or family member to help prepare their taxes this year. Consider asking those who are close to you if they can lend a helping hand. It may make the process easier and can help you save extra dough.
  • Use a coupon: Many professional and online tax preparation services offer coupons to help filers save money. Head online to check out the tax preparation offers from services like H&R Block and Turbo Tax on
  • Seek out free resources: Organizations like VITA (Volunteer Income Tax Assistance) and AARP, among many others, offer complimentary volunteer resources depending on various criteria. Before you file your return, check to see if you qualify for free assistance.

Published with permission from RISMedia.