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  December e-news!

    In this edition:
  • Give a little bit (to charity!)
  • Tips for responsible holiday credit card use!
  • Tax time is right around the corner....
Give a little bit (to charity!)
Holiday season is a time of charitable giving…and lots of charitable solicitations. Along with that good-feeling of giving back to the community, it doesn’t hurt to get that end of year tax deduction when you donate to licensed non-profits. But, with all the good stuff out there, how do you decide which of the many worthy organizations to give your hard earned money to?
  • Make a list: Start a folder with all of the solicitations you receive from charities. Then, sit down and make a plan for when and which organization(s) you will donate too. This has many benefits. First, you plan your giving, and get a better idea of how much you’re donating from your own budget. Second, when you’re solicited by phone, you can politely and truthfully say that you make all of your donations at one time, and if they can provide information to you via mail or email, you will consider donating to the cause. Third, you have a handy list all ready for tax time.
  • Find an “unsung hero”: Higher profile national organizations tend to get more donations. Consider looking into some of the smaller, local organizations for your gifts. Your donation can make a huge difference in the budget of a smaller initiative.
  • Give time, not money: If your budget is tight, but your heart is big. find a place where you and maybe your whole family can help out with your time and energy! Check out local papers and www.unitedway.org for volunteer opportunities.
  • Use your judgment: Unfortunately, there are those who prey on the kindness of strangers around the holidays. If you suspect an organization is not legitimate, do some research. One great resource is give.org, a web site maintained by the Better Business Bureau with information about local charities, scams and charitable giving.


Helpful tips for responsible holiday credit card use!
 Ah, the holidays. The season of giving and giving and giving… But who’s paying for all of this? And how? It’s ok to run up a little extra on your credit cards, but make sure you’re not inadvertently affecting your credit score with your holiday spending.

Keep credit card balances under 50%: Take your maximum credit limit. Divide it in half. Do not spend over this line. Running credit up over that 50% mark can affect your credit score and that will hurt later on.

Have a plan for repaying it: A written one, not a mental one that you make in the mall while justifying more purchases. Make sure your plan takes into account winter heating costs, worst case scenarios (what if you don’t get that bonus?) and the interest that will quickly begin to build on your balance.

Be wary of buy now, pay later: Zero interest until 2006 does not mean free. Be very wary of these loans, and opt instead for a standard loan with a lower interest rates. Some zero-interest loans can look bad on your credit report and can ultimately prevent you from big purchases like buying a home or car. We’ve seen it.

Tax time is right around the corner…
 Not to rain on the holiday parade, but tax time is just around the corner. Start sorting and preparing your paperwork now. Make a folder or designated place where you’ll put tax-related documents as they come in. And, especially new homeowners, learn the ropes of tax-time once you own a home.

Nine Home Related Tax Deductions

PLEASE refer to www.IRS.gov for specifics in every case. This information is excerpted from the tax law site www.nolo.com.

1. Mortgage Interest.
Mortgage interest is deductible – including the interest that you pay in January (since you’re actually paying a month in arrears.)

2. Points
A point equals 1% of the loan principal, and if you paid points or “origination fees,” you can fully deduct these fees associated with a home purchase mortgage. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.

3. Equity Loan Interest
You may be able to deduct some of the interest you pay on a home equity loan or line of credit.

4. Home Improvement Loan Interest
If you take out a loan to make substantial home improvements, you may be able to deduct the interest on this loan. However, the work must be a "capital improvement" rather than ordinary repairs. Qualifying capital improvements are those that increase your home's value, prolong its life, or adapt it to new uses – see http://www.irs.gov.

5. Property Taxes
Often referred to as "real estate taxes," property taxes are fully deductible from your income. You can't deduct escrow money held for property taxes until the money is actually used to pay your property taxes.

6. Home Office Deduction
If you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation. Further details can be found in IRS Publication 587, Business Use of Your Home.

7. Selling Costs and Capital Improvements
If you decide to sell your home, you'll be able to reduce your taxable capital gain by the amount of your selling costs. Real estate broker's commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs. In addition, the IRS recognizes that costs ordinarily attributed to decorating or repairs -- painting, wallpapering, planting flowers, maintenance, and the like -- are also selling costs if you complete them within 90 days of your sale and with the intention of making the home more saleable.

8. Capital Gains Exclusion
This is a true tax shelter for those who are treating home buying as an investment. Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. Single folks and married taxpayers who file separately get to keep up to $250,000 apiece tax free -- including single people who own a home jointly.

9. Moving Costs
If you move because you got a new job, you may be able to deduct some of your moving costs. To qualify for these deductions you must meet many requirements, available on the IRS web site, but it’s worth looking into if you moved for a job.

Contact Bauer Mortgage today for a no-hassle, no-pressure conversation about how you can save money by getting rid of your rising-interest rate loans!

Please email us or call anytime at 603-430-7729.

Seacoast Bauer Mortgage Group
(603) 430-7729
Toll free: (888) 252-2837 
Fax: (603) 430-0008
 170 State Street, Portsmouth, NH 03801

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We are an Equal Housing Lender and affiliate member of the Seacoast Board of REALTORS(r). All content Copyright (c) 2003, Bauer Mortgage Group, LLC. Licensed by the New Hampshire Banking Department. ME License #CF0-5633.