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Columbus & Central Ohio, United States
DeLena Ciamacco is a well-known, respected Top Producing Realtor in Central Ohio. Her myriad of accomplishments, recognition, and professional credentials as they relate to Real Estate, make her a perfect individual to provide insight to the masses on all aspects of Real Estate sales. Her creativity and honest approach to marketing Real Estate has enabled her to succeed in her career. DeLena’s philosophy is “An educated and well prepared Buyer or Seller is a smart Buyer or Seller”. Her desire is to inform the public, by pulling from her 20+ years of Real Estate sales & Marketing, what is necessary to get to a successful closing in these challenging times.

Tuesday, January 8, 2013

The Fiscal Cliff Deal : What Homeowners Need to Know

Thankfully, 2013 did not begin on the sour note it could have: a deal was reached by Congress in the wee hours of January 1st to prevent potential economic disaster and steered us away from the “fiscal cliff” you’ve no doubt heard so much about in the past month. While we can debate the pros and cons of this deal no doubt, most home owners, sellers, and potential buyers have just one question: How does this impact me?  

Depending on where you fall on the earning scale, the fiscal cliff deal was either good or bad for you; all those making under $400,000 individually ($450,000 total household) will keep the tax rates they now enjoy. If you make over this amount, your taxes are set to increase to the same rate they were back in 2003 at 39.6%, up from the 35% they were previously. Capital gains taxes will also go up from 15% to 20% for the same income bracket. While this doesn’t directly affect the housing market, you can bet that people feeling the financial pinch will be more reluctant to make big property purchases. 

However, the great thing about the fiscal cliff deal is that two major housing related tax provisions were left untouched: The mortgage interest deduction, and an extension on the tax relief for mortgage debt forgiveness. These two provisions are key in keeping homeowners from going into foreclosure and in their current homes. The deal also allows borrowers to deduct the amount they pay for private mortgage insurance, another great incentive when it comes to buying a new home.
Take a look at the details of the deal:

Homeowner Tax Items
             Extends through the end of 2013 mortgage debt tax relief
o             The legislation extends the tax exclusion for cancelled or forgiven principal residence debt, enabling short sales and reducing downward pressure on housing prices.
o             Also enables mitigation efforts via government and lenders

             Deduction for mortgage insurance extended through the end of 2012
o             The deduction remains phased-out ratably by 10% for each $1,000 by which the taxpayer’s AGI exceeds $100,000, with complete phase-out at $110,000
o             Extending the deduction reduces the cost of homeownership for those using PMI, FHA, or VA mortgage insurance, particularly first-time buyers

             Extends the section 25C energy-efficient tax credit for existing homes through end of 2013
o             Tax credit is a key tool for the remodeling community
o             Extends the credit at the $500 cap level, as was the case in 2011

             Reinstates the Pease/PEP phase-outs for deductions
o             For married taxpayers above $300,000 ($250,000 single), the Pease limitation reduces total itemized deductions by 3% for the dollar amount of AGI above the thresholds
o             For example, a married couple at $350,000 is $50,000 above the limit, and must reduce the Schedule A deduction total by $50,000 times 3% or $1,500, increasing their tax by approximately $300.
o             No more than 20% of the phase-out is attributable to the MID and the Pease rule will affect a very small number of current MID beneficiaries


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