Andy Hough

Why Should You Downsize to a Smaller Home

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In tougher times and especially with the issues that face our economy today, families should consider downsizing to a smaller home as an option to deal with a shortage of funds. Many families have been hit hard in this economic downturn, and can’t afford the hidden costs of owning a home. For those who don’t want to move in apartments or condos, downsizing is one way to stay in a house, but cut costs.

If you don’t already own a home now is not the best time to buy, especially if you’re unsure whether the house is a long-term commitment.. Buying a home isn’t necessarily a bad thing. There are many benefits, such as building credit through payments, tax benefits, and no noisy apartment building neighbors. However, there are costs for maintenance of a home and insurance coverage,

Larger homes have more space, but these can be hard to keep clean over time. If you just take into account the cost of energy it takes to heat a larger home the downsides start to become obvious. The cost of gas is only going to rise in the coming years so you should consider this fact before deciding on your next living space. Also consider the other expense like property tax, insurance, and maintenance. These factors can make your living situation economically unbearable.

Once you decide decide to downsize there will be items that you don’t want to throw away. They might be belongings that you don’t want to part with or family heirlooms. If this is a concern, there are options, such as storage facilities that can accommodate any storage needs you may have – from extra bookshelves to the family boat.

Renting is a cheaper way to live, but you’re getting nothing back from your investment. If you still want to own your own home you can still downsize and have all of the investment benefits that come along with ownership. Take a look at the market and see what’s available. It may be a decision for you that has more pros than cons.

Updated!! H&R Block Online Tax Software Giveaway

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****Contest is now over. The winners have  been chosen and notified.

In exchange for publishing the previous post H&R Block is providing me with free copies of the Federal Premium version of their online tax software.  I’m going to be giving away two copies here as well as giving away copies on my other sites.  I’ll provide links to the other giveaways later.  This software should allow you to do your federal taxes for free but if you use it for your state taxes as well you will have to pay a fee for that.

This contest will be a little different than the others I’ve had.  Now that I’m starting to make some decent money online I am forming an LLC and opening a business account for my online businesses.  I could just use my name for the business but I’d like something a bit more creative than that.  I’ll be giving away one copy of the tax software to whomever comes up with the best name for my business.  Creating a name out of the blog name or my name is my preference but if you come up with a good name that doesn’t use either of those I’ll still consider it.  In addition to the copy I give away to whomever comes up with the best name I’ll also give away a copy at random.  Just leave a comment on this post to enter. The winners will be chosen this Monday, February 7,2011.

You can also enter this online tax software giveaway or this tax software giveaway at my other sites.

Making Cash Selling Your Old Stuff Online?

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If you’re in it for the profit or if it’s more than an occasional sale, you may be crossing the line.

You love holding garage sales, and selling on eBay and Craigslist. You’ve become expert at holding garage sales – friends seek your advice for success and you’ve cleaned out your attic and closets. You don’t want to stop, but you’ve run out of items to sell.  “Maybe you can buy that sweet chair at the sale around the block and with a little *brush up* sell it for more than the neighbor asked?  Um, maybe that lamp at the flea market could go for more if you added some beads…”

“Look out – you may be crossing a line,” says Leigh Mutert, CPA and Community Manager at H&R Block. “Whether sales occur occasionally or regularly, and if there is intent to make a profit are two factors that separate casual sellers from hobbyists and business operators,” says Mutert.  Remember, most casual sellers are holding sales where the items are sold for less than the seller paid for the items – i.e. there isn’t a profit or gain.

A taxpayer with a hobby must report all income generated from sales.

  • As a hobbyist, the taxpayer may deduct all related expenses, but not more than the total revenue from that hobby.
  • This means that a hobby can’t generate a loss on your tax return.
  • If your activity is a hobby, report your income on line 21, Form 1040. Check out a full list of Hobby Expenses Tax Tips.
  • A hobby that supplements income could be considered a business by the IRS.
  • An H&R Block professional tax advisor help you determine if you need to file as a business; get a free 30-minute tax consultation at an H&R Block office near you.
  • If a taxpayer regularly buys and sells items to the extent that a business results, each sale has a tax consequence.
  • If the taxpayer is the sole owner, purchases and sales must be reported on Schedule C.
  • For example, if a business buys basketballs for inventory at a wholesale price of $3 each and sells them for $10 each, the business can deduct the $3 cost. The $10 sales price is revenue and the $7 profit is taxed. If a basketball is sold for $2, the $1 loss is deductible.
  • Also, there are several Schedule C tax deductions the business owner may be entitled.

ALERT for Online Sellers: For 2011 returns, taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions will receive the new 1099-K Form, which will report payment card and third-party transactions, including PayPal and eBay payments.

For more expert tax advice on any topic go to H&RBlock.com. H&R Block At Home online and desktop solutions for tax filing make it easy to file from home., or you can find an H&R Block office near you.

Mystery Shopping Road Trip

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My wife and I went on a mystery shopping road trip Wednesday.  This is a good way to increase your earnings from mystery shopping.  We did shops in some small towns that were 1-2 hours away from us.  Shops in little towns often go undone and the mystery shopping companies will give you nice bonuses to do them before the end of the month.  It isn’t cost effective to drive an hour or so each way for just one shop but by both of us going we were able to make the road trip worthwhile.  We did two bank shops and four fast-food shops.  The bank we shopped for only allows a shopper to do one shop a day but since there were two of us we were each able to pick up a nicely bonused shop in towns located close to each other.  At the end of the day we made about $150 and had received five free meals and only spent about $20 on gas.  Since we only actually worked a couple hours each I consider that a pretty good deal.

Incandescent Bulbs Being Phased Out

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I was surprised to read yesterday that incandescent bulbs are being phased out in the United States.  I was aware that they were being phased out in other countries but somehow missed the news that they were being phased out here.  Under the Energy Independence and Security Act of 2007 signed into law by President Bush most incandescent bulbs will be phased out between 2012 and 2014.  This will leave CFLs as the main lighting option.  The goal of the legislation is to increase energy efficiency.

I like CFLs but I still only have a couple in my apartment.  This is mainly because the apartment I live in supplies most of the bulbs and they aren’t CFLs.  I just use CFLs in a couple of lamps.  When incandescent bulbs are no longer available the conversion to CFLs could be expensive for some people although they will eventually save money in the form of lower electric bills.  Even though I think everyone should use CFLs I’m not sure if I agree with giving people no other choice.  What do you think?