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Monday, February 3, 2014

What home improvements are tax deductible?

Home ownership has numerous tax benefits, and making adjustments to your home can be lucrative.  However, the tax benefits gained by making improvements are not very straightforward; it's a good idea to be well-informed before you start any projects.

Making improvements to your primary residence is not tax deductible in and of itself. Home improvements that increase the value of your home are personal expenses. But there are several ways you can receive a tax benefit from making home improvements.

Image Courtesy of Shutterstock

Making home improvements that increase your home's value

When you make substantial improvements to your home - such as roofing, renovating a room, adding a new bathroom, an addition, or exterior improvements like walkways, driveways, fences or landscaping - it increases your home's basis - that is, the amount invested into your home. For example, if you buy your home for $400,000 and you make $50,000 worth of improvements, your basis increases from $400,000 to $450,000. 

Why does this matter? When you sell your home, you would hope to sell it at a profit.  However, if your basis is higher than when you bought the home, your profit will drop. The only amount that is subject to taxes, when you sell your home, is the amount of profit. So, if you sell your home for $600,000, your profit will be $150,000 instead of $200,000 and you will only be taxed on that amount.  (You may also qualify for other tax benefits, such as the home sale tax exclusion, upon sale of your home. Check with your tax advisor.)

Image Courtesy of Shutterstock

Renting part of your home

If you rent out a part of your home, you can count some of your home improvement costs as rental expenses. That is, improvements to a rental property are handled differently by the IRS than improvements to a personal property. Thus, you can deduct the cost of home improvements over several years. You and your tax advisor will need to do some math to determine what percentage of your property can be considered a rental property and how much of the expense of improving your home can be deducted.

Using part of your home for a business

Using part of your home for a business is another way to reduce some of your home improvement costs.  For improvements made solely to the home office, you may deduct 100 percent of the cost, so long as your home office is used exclusively and regularly for business purposes. If you make other improvements to your home, you may be able to deduct a percentage of the costs based on the percentage of your home being used for business purposes - much like the rental situation described above. 

While making improvements to your home is not an automatic way to gain tax benefits, there are several options for benefiting from beautifying your home. Before you begin any home improvement project, make sure you know the current value of your home and the amount you have invested in it (your basis). Also, gather together any information you have about rental or business use of your property so that you have it available when it's time to file. The more information you have available, the more likely it is that you will receive some tax benefits from improving your home.

This article was written by Richard Craft, an MBA student who hopes to help you with your personal finances. He recommends considering Texas Stone Sealers, your number one choice when performing home improvement projects that involve sealing and cleaning flagstone. Take a look at their website today and see how they can help you!

The top 4 growing online industries

By Amy Thomson

Online entrepreneurs bypass a significant amount of fees that store-front organizations cannot avoid — like a one-time domain fee opposed to a monthly rent check. Online businesses make an exceptional use of minimal resources and when done right, they can be extremely lucrative.
e-business growth
Online business often requires less capital investment

The advantages of starting an online business include nominal capital investment, easy access to help, such as web designers and e-commerce professionals, and the ability to establish something quickly. The Internet is a free, accessible source for virtually all the information you need to start an online business and your new business’s home.

One of the best parts of starting an e-business is your immediate worldwide reach. For example, the Wall Street Journal reports that online shopping for Christmas rose 14 percent this year in the United States, and the United Kingdom has shown similar growth in this sector. This clearly indicates the increased interest in online shopping, and other types of online businesses are experiencing similar levels of growth. 

Retail markets

Online retail spending breached the billion dollar mark on Black Friday last year, which was a 15 percent increase from 2012’s revenue, according to research conducted by ComScore. Online retail stores reach a larger audience than physical store fronts. Starting this business could be as simple as finding a niche, developing your own product or finding products which fit your market and developing a trendy online site to sell them.  


As some books and short stories are now being published straight to the electronic-reader market, e-publishing is another area of continued online growth. Whether you have your own materials to publish or are interested in publishing other people’s works, e-publishing is a relatively simple online business to both begin and maintain.

Virtual meeting rooms

Another excellent choice for an online business is creating virtual meeting rooms. As businesses become more global, the need for a secure place to exchange sensitive information from all over the world also increases. The obvious benefit of this resource to businesses is that it both eliminates the need for travel and provides an immediate location for group meetings.

Social network gaming

One of the fastest growing online business fields, according to Forbes and others, is the social network gaming industry. This is due, at least in part, to the huge increase in the number of people who now possess tablets, e-readers and other mobile devices. The online gaming industry has increased by more than 180 percent over the past five years, and that number is only likely to increase as the number of Internet and mobile device users increases. Entertainment software and coders who know how to create games are easy to find online, and with an interesting idea you could soon be the proprietor of a new hit game.

Other online business ideas which have experienced growth, particularly in the past few years, include fantasy sports services, specialty food stores, translation services, travel services and online payment processing tools. The Internet offers unlimited opportunities in every area, particularly to those who are interested in finding a new way to do business. What was once available only to big businesses or companies is now accessible to anyone with the desire to innovate and the courage to start something new. If you are interested in pursuing something you are passionate about, as well as maintaining control of your own business and financial future, an online business is worth your consideration. 

About the author: Amy Thomson writes about technology, career success, and education. When she’s not writing, she’s skydiving over the Rocky Mountains.
Image license: SEOPlanter, CC BY 2.0  

Sunday, February 2, 2014

The GOP: Between a rock and a hard border on immigration reform

Will immigration reform happen?

Demographics spell the end of the Republican Party. No less a conservative light than Lindsey Graham (R-SC) admitted this, telling The Washington Post in its August 29, 2012 article, “The demographics race we’re losing badly. We’re not generating enough angry white guys to stay in business for the long term.” Post-election soul searching by the GOP after November 2012 produced acknowledgement that the party needs to appeal to a diverse population, including Hispanic voters.

November 2014 mid-term elections offer the first real test of any new branding efforts, and House Speaker John Boehner has begun floating trial balloons to see which immigration reform ideas appeal to a demographic slice that brings new voters into the GOP without distancing its aging, diminishing base.

Boehner is launching his balloons in a field of barbed wire, since GOP-sponsored immigration reform must simultaneously assure Hispanic voters that the Republican Party has evolved while also convincing the conservative core that the borders will not fall.

Working together? Are they even trying?

Parts of the “Gang of Eight” immigration reform will reappear, piecemeal, in other trial balloons: paths to citizenship (once disparagingly called “amnesty” by the very House members now proposing them), work visa options and employment verification systems.

The Party of Lincoln has had a history of missteps in wooing Hispanics, not least because it assumes Mexican immigrants—by far the largest segment of Hispanic voters—are conservative in politics because they are seemingly conservative in other areas. Says Dr. Stephen Steinlight of the Center for Immigration Studies, “The premise and stereotype are equally false. There’s no correlation between ‘strong family values’ and conservatism.”

Conservative groups have opposed moves by politicians to “evolve” on immigration issues. Rep. Ted Poe (Texas), former immigration hardliner, offered a timid suggestion of reform and immediately came under attack by Americans for Legal Immigration PAC (ALIPAC). The momentum of reform depends on who politicians listen to: the majority of Americans and many within the Republican Party who see urgency in instituting immigration reform, or knee-jerk conservative organizations who oppose any acknowledgement that the country’s population is changing.

Boehner's Republican-controlled House has done nothing to advance the Senate’s broad immigration reform of June, 2013. Others in his caucus are sensing the need for change and have begun readying bills that offer the same amnesty the GOP decried just last year. Democrats can sit back while watching Republicans scramble to say they are working on reform. 

Looking ahead to 2016 for the GOP

Pretenses of dealing with immigration may carry Republicans through this fall’s elections, but, as Senate Minority Whip John Cornyn says, "We can win in 2014 without resolving it. We can't win in 2016 without resolving it.”

The GOP must provide substantial ideas, either through a series of smaller bills or by advancing the already extant Senate reform, to win Hispanics and widen its base.

For immigration reform supporters, any sign that the GOP is willing to take on the issue—whether for the Party’s survival or for nobler reasons— is welcome progress. Expect to see increased work on immigration reform as a result of party politics and demographic reality. 

About the author: Mark Coleman is a writer and editor to blog at Dinlaw.com, an Immigration Law Firm out of Chicago, IL

Saturday, February 1, 2014

How to make DIY furniture

By John Paul

Buying furniture is overrated. The age of the hipster has made DIY jobs almost as cool as Michael Jackson’s moonwalk. Also, purchasing brand-new fixtures for your apartment will cost you an arm, a leg, two toes and an ear. Basically, it’s cheaper and cooler to do it yourself.

Do-it-yourself furniture is fun to make
DIY furniture save money and is custom made
If you’re new to DIY, you can still create amazing pieces of furniture. Follow these tips –you might just have a hip apartment in no time. 

Awesome couches

You don’t need expensive wood to make high-quality furniture. Purchase pallets from your local hardware store. Stack one on top of the other and place them against the wall. If you want to make your DIY lounger more stable, use nails, screws or cable-ties to secure the different pieces together.

To create the cushions, find stuffing that has a good density. Measure the length and width of the pallet, as this will allow you to cut the padding into singular blocks. Thereafter, use cotton or linen fabric and upholster the cushion.

Add scatter pillows for a splash of colour or a contrasting pattern – they look good and make excellent back rests.

The coffee table

Tables can be quite pricey, especially when going after something unique and chic. For this project you’ll need two or more empty beer kegs. Wooden ones are hard to find, so go for conventional steel casks. For the table top, purchase a piece of glass and cut it to match the circumference of the barrel. If you’re keen on DIY, get hold of a brass cutter – it’ll definitely come in handy.

The floating bucket

Floating bookshelves are basically books mounted against a wall on a stand that can’t be seen. This gives the illusion that they‘re suspended in mid air.
For this project you’ll need wall brackets, a power drill, some screws and an even number of small clamps.
  1.   Use the power drill and screws to attach the bracket to the wall.
  2. Insert the flat part that juts out into the largest hardcover novel, like a bookmark, keeping the bottom cover below the bracket and the bulk of pages on top.
  3. Now secure the book’s front and back covers together with clamps.
  4. Finally, pile smaller books on top.  
Viola. Now you have floating bookshelves. 

The light bulb lamp

Just because your light bulb no longer serves its original purpose doesn’t mean you have to throw it away. You can use it to create an oil lamp.

  1.  First, disassemble the light bulb by removing the coil.
  2.  Glue the bulb to a flat surface of your choice.
  3.  Get a bottle cap or use the existing metal cap, drill a hole through it and insert a shoe lace.
  4.  Fasten the cap onto the light bulb.
  5.  Fill the bulb up with paraffin and close it with the cap.

And – presto – you have a lovely lamp. 

DIY furniture will give your home a unique appearance and save you money. Handyman projects are also good ways to spend your weekends. So when you decide to give your home a personal feel, get those tools out and start creating marvellous, functional works of art. 

About the author: John Paul is an interior designer and part time blogger. He likes taking old spaces and recreating them into new living spaces. He especially likes redecorating bathrooms with modern fixtures.

Image license: Mark Larson, CC BY-SA 2.0