Author: Mike Holman

Categories
Real Estate

8 Reasons Why You Should Use A Real Estate Agent

Mr. Cheap & I have published a rather large number of posts where we point out that SOMETIMES real estate agents are not your friend, associate or even on your side and they definitely can’t ALWAYS be trusted. Heck, sometimes people DO use a friend as a real estate agent and SOME agents must be foolish enough to be honest with clients.

That said, neither one of us has anything personal against agents  – most of our complaints have to do with their compensation system which is determined by the large real estate brokerage companies who control MLS (for now).

In fact, I recommend that most people should use a real estate agent for a number of reasons.

1)  Knowledge of the local market prices

Yes, your agent will undoubtedly withhold and manipulate data as they see fit for their own gain, but the fact remains that they should have more knowledge than you regarding local market conditions.  Unless you are willing to spend a ton of time learning the market yourself then it’s worth paying for someone else’s experience.

2)  Knowledge of local landscape

When I bought my first house I had a few pretty nice areas in mind where I wanted to live.  Once I figured out that I couldn’t afford to live there then my agent suggested a couple of areas that were not quite as nice (which is not to say they were bad).  If you don’t know all the areas in your city or if you are new to a city then hiring a local real estate agent can be quite helpful.

3 Access to house details and comparative sales

This is the big reason why MLS is so valuable.  If you are selling a 3-bedroom semi in Leaside then you look at all the recent sale prices and get a better sense for the market.  This info is available from other sources such as city hall but it is very difficult and inconvenient.

4)  Easier access to houses

This is one of the biggest advantages of having an agent regardless of how experienced you are with buying houses.  The fact is that people selling a house are not going to let you in without an agent.  You can contact the selling agent to book an appointment but there is no guarantee they will play ball.  Open houses are a good way to look at a house but they are quite limited.

Another problem is that sometimes buyers without agents are considered “ignorant” and might not be taken seriously.

5)  Transportation when looking at houses

The two agents I’ve dealt with on the buy side always drove me around to look at houses.  Considering I had a car this wasn’t what I would call an overly valuable service but for a house buyer that doesn’t own a car, this would come in pretty handy.

6)  Less stress to close the deal

One thing about an agent is that they will do all the administration for documents, finances etc.  This service might not be worth the money it costs, but regardless, it’s work you don’t have to do.

7)  Renovation ideas

Agents tend to have at least some knowledge of renovation and design ideas so for a client who has a problem with the layout/condition/colour of a potential house, that agent might be able to lend some insight about how to change things.  You have to remember that the agent is doing whatever they can to get you to buy the house so they will estimate potential renovation costs WAY on the low side.

On the sell side, the agent should be able to know what buyers are looking for and can make suggestions to the home owner on what parts of the house to fix up for sale.

8) You are going to pay anyway.

Even if you do the dual-agent ripoff thing you will still be paying for an agent anyway since the “dual” agent will just collect twice as much commission so you might as well get some service out of it.

So there you go – all the reasons you need to get a real estate agent, hold your nose over the fees and get going on your real estate adventure!

Categories
Money

How To File Your Federal Taxes Online For Free


Everyone has to file their taxes and nothing is worse than having to owe money at tax time AND have to pay a fee to do it!  Well, for certain tax situations you can file your taxes for free!

Basically if you have a fairly simple tax return (only use the 1040 type forms) then you can file your federal taxes for free.  The TurboTax Online Free Edition offers free federal tax filing.

Here are some of the features of TurboTax Online Free Edition

  • Audit support center – Step by step guidance in case the IRS contacts you about your tax return.
  • Saves your work – You can finish the return in as many different sessions as you wish.  TurboTax will remember your work from previous sessions.
  • Upgradeable – If the free edition is not sufficient for your tax filing needs then you can upgrade at any time to one of the pay versions of TurboTax without losing any of your work.
  • Live tax answers – Live answers available from TurboTax experts.
  • Free tech support
  • Error checker – A feature called “Smart Check” will verify your return for possible mistakes.
  • Up to date – TurboTax is always up to date with the latest tax laws.
  • Refund real time – You can always see your tax refund adding up as you fill out the forms.

Give it a try and let me know what you think of this software!

Another option if you don’t like TurboTax is H&R Block at Home (formerly TaxCut) Free Edition.  This program is similar to TurboTax in that the software is free and you can file your federal taxes for free as well.

Check out a more comprehensive review of all the editions of TurboTax.

More resources

Should I use tax software or do return by hand?

Free federal online filing

Categories
FrontPageOnly

TurboTax Review – Get Some Help With Your Taxes Preparation

TurboTax is a popular software program that allows users to easily fill out their tax return forms. There are a variety of versions of the program available, each offering options to suit the needs of specific users. Each version is consumer friendly and walks you through the forms you need to fill out, step by step. Once you have completed your return TurboTax users can e-file their federal tax return for free.

Here is a more complete review of TurboTax.

TurboTax encourages e-filing for a variety of reasons. E-filing your tax return versus paper filing has its benefits. First, there is a much less chance of error over paper filing. Once you have filed your return you will receive a confirmation that it was received. You won’t need to worry if your return got lost in the mail. Finally, you will receive your refund quickly, in as soon as eight days after filing.

If you are ready to get started in your tax preparation with TurboTax, but are unsure of which version will be best for you, here is a look at the different options and what they offer.

TurboTax Basic

The Basic program is easy to use walking you through each step. It is recommended if you are filing and easy return, one with no deductions. All forms that are needed are included and the program checks for accuracy.

TurboTax Deluxe

The Deluxe version offers all the same benefits as the basic. It also helps you find all of the deductions and credits you are entitled to. It asks you questions along the way to be certain that you have not missed anything. The program works to ensure you get the maximum refund you are entitled to. The Deluxe version is also set up to help reduce the risk of being audited.

TurboTax Premier

The premier addition offers users all the benefits of the basic and deluxe. In addition this version provides users with guidance on their investments and is recommended especially for those consumers who own stocks, bonds and mutual funds. Another great feature of this program is the guidance it offers to those users who have investment or rental property.

TurboTax Home and Business

This version offers all the great benefits already listed in the other versions with additional guidance to those who are sole proprietors, contractors, consultants or single owner LLC.

TurboTax Business

TurboTax business is tax software for corporations, partnerships and multiple owner LLC’s. This version walks business owners through the forms they will need to fill out to get the best tax savings. With this version up to five federal tax returns are included for free e-filing.

As already mentioned, all TurboTax versions come with free federal e-filing. Free State filing is also included when you purchase on line federal and state TurboTax products. With each on-line version purchase you can file up to three state returns for no additional cost. If you choose to purchase the TurboTax CD or a down loadable version of the program your state return will be just $19.95 for the first three state returns.  Here is a discussion of the differences between the online version vs desktop version of tax software.

More resources

How to organize your tax paperwork

How to file your federal tax online for free

Categories
FrontPageOnly

How Many Years Should You Keep Tax Paperwork


A common questions asked by taxpayers is how many years tax records must be kept. The answer to this question is not cut and dry and varies depending on the documents in question. The general consensus is that seven years is a safe bet however the actual amount of time required by law may be fewer than seven years and in some cases longer. Here we look more closely at the length of time tax records should be saved.

If you thinking about buying tax preparation software then consider software programs such as TurboTax or TurboTax Canada (formerly QuickTax).

According the the Internal Revenue Service (IRS) the specific length of time depends on the period of limitations for the particular return. The period of limitations is defined as the length of time that you are allowed to amend your tax return or the amount of time the IRS can audit your return. As a general rule the period of limitations begin on the day your taxes were filed, unless you filed your taxes early at which point the period of limitations would begin on the due date. The IRS recommends keeping tax records not just for legal reasons but also to help prepare future returns or when filing an amended return.

This information is critical to filling out your tax return.  Especially if you are using tax software such as TurboTax.

The following time table will help you determine how many years tax records must be kept:

Three years– Anyone owing additional taxes must keep their records for three years. If you have filed a claim for a credit or tax refund after you have filed your return you must keep records for three years from the date you filed your return or the date you paid taxes.

Four years– Employment tax records must be kept for a minimum of four years from the date the tax was due or paid.

Six years- If you have filed a tax return the did not include reportable income (more than 25% of the gross income reported) you must keep your tax records for six years.

Seven years– When a claim has been filed for a loss from securities or bad debt, all records must be kept for seven years.

Indefinitely– If you have not filed a tax return or file a fraudulent return, you must keep all records for that period of time indefinitely.

In addition to the guidelines listed here for tax returns, the IRS also recommends that you consider whether or not tax records are connected to assets or non tax purposes which may require you keep them for a longer period of time. Tax returns and associated documents may be needed to determine depreciation, amortization or depletion deductions when the time comes to sell property.

There are other situations which may require a taxpayer to retain tax returns and other documents beyond the period of limitations set by the IRS. Insurance companies and creditors in some cases require tax return records past the standard period of limitations. To avoid disposing crucial tax documents you may want to consider your own maximum period of limitations to ensure you are not destroying records that may be needed at some point down the road. It is also important to remember that the IRS destroys your original tax return three years after the maximum period of limitations, making it even more important to ensure you will not need any information associated with a tax return before destroying the documents.

More resources

Federal taxes free online filing

Popular tax software – TurboTax review

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FrontPageOnly

What Happens If You Lose Your W2 Form?


During tax season, there is a lot of hustle to make sure you have the right documents, forms, and information that will allow you to file taxes in a timely manner. Taxpayers must often wait to receive this information in the mail before proceeding to their tax preparation office or preparing their own files using tax software. One document vital to the tax filings is the W2 form which employers provide to their employees to prove wage earnings and tax statements for individual returns. The employers are required by law to send out the W2 forms before the end of January. Many times the forms can arrive late or not at all. It may also be a possibility that your W2’s were received fine but subsequently lost before filing taxes.  The information on your W2 form is key to completing your tax return especially if you are using tax software such as TurboTax.

Get a New W2

Since time is of the essence and taxes must be filed before the April deadline, it is important that you make the effort immediately to have a new W2 sent to you. You can start by contacting your current or past employer who would have issued the W2 from. Explain your W2 was never received or accidentally lost and request that a new one be mailed to you. Many times as people move, their tax documents will not be forwarded correctly so be sure your employer has your correct mailing address.

If you are unable to contact your employer, which may be the case with previous employers or closed businesses, you can contact the IRS directly. You will need to provide the representative with your employment information, current mailing address, and an estimate of how much money you earned for the tax year. The IRS will be able to guide you based on the information they have received from your employer.

Filing Taxes Without Your W2

If the deadline is approaching, you should still file your tax return on time without the W2. You can complete Form 4852, which is a substitute for the W2 form. You can use past pay stubs to help guesstimate how much money you earned as well as the amount of taxes withheld for the tax year. After you have filed your tax return and you receive a copy of the lost W2, you must amend your federal return as soon as possible.

It can be very easy to lose or misplace an important tax document such as the W2. At the start of each year, you can prevent this from occurring again by establishing a file folder and placing all relevant tax documents, receipts, and paperwork into it for the rest of the year to make tax filing easier. You should also remember to create a list of people and places to contact should you move to a new address within the course of a year. Include on this list current and former employers so you’ll remember to advise them of the changes before tax time rolls around again.  Keeping your tax paperwork organized can make your life a lot easier around tax time.

More resources

2009 Income tax changes

Check out a comprehensive review of all the editions of TurboTax tax software.

Categories
FrontPageOnly

How Long Before I Get My Income Tax Refund?


There are two ways for a taxpayer to get back their federal income tax refund. They can opt to have the refund amount direct deposited into their bank account or they can request a paper check be mailed. The option you choose will affect the amount of time it takes to receive your refund. It also matters how you have filed your tax return and if the return was accurate.  Using a tax software program to do your tax return such as TurboTax will help speed up the process and should increase accuracy as well.  There are various factors to consider between efiling your return or mailing it.

Tax Refund for Electronically Filed Income Taxes

Generally, if you complete an accurate tax return, filed electronically, and requested a EFT (electronic funds transfer) where the refund amount goes directly into your bank account, your refund should be available within three weeks of your return being acknowledged and processed by the IRS.

Tax Refund for Income Taxes Filed Through the Mail

If you requested a paper check, the three week time period still applies but it may take a bit longer to receive via regular mail. If you filed a tax return by mail, your refund will be issued within six weeks from the date the return was received by the IRS, whether or not you opted for a paper check or an electronic deposit.

Incomplete Income Taxes

Taxpayers who file a return that has been deemed incomplete or must be amended can expect to receive their refund within 8-12 weeks after the confirmation of filing is provided. If you file a Form 8379 (Injured Spouse Allocation), expect your refund to take even longer depending on the situation.

Check Status of Tax Refund

All taxpayers can check the status of their refund money via the Internet or by calling a toll-free hotline. Taxpayers must wait at least 72 hours after an electronic tax filing before they can check their refund status. Individuals who have filed via mail will need to wait at least 3 weeks after making in the form. The refund information system is automated. You will need to know your filing status, Social Security number and the exact whole dollar amount in order to access refund information via the automated system. Internet users can visit the ‘Where’s My Refund’ page at the IRS.gov website. Callers can contact the toll free hotline at 800-829-1954 begin_of_the_skype_highlighting              800-829-1954      end_of_the_skype_highlighting. Taxpayers can access the date of the approximate arrival of refunds and will also be advised as to any tax preparation errors or delays in processing.

Verify Tax Refund is Correct

Once a refund is received, taxpayers should check to ensure the amount is correct. If a check or electronic deposit arrives for more than the amount listed on the tax return, the check should not be cashed. A notice will be sent out from the IRS explaining the discrepancy in amount. If no letter is received in a timely manner, taxpayers should contact the IRS office by phone or via their website. In the even a refund arrives for an amount smaller than expected, the check can be cashed. A check in the amount of the difference will be mailed at a later time. All inquiries should be made by the filer directly to the IRS office at 800–829–1040 if a notice or follow up check have not been received within two weeks. If refund checks do not arrive at all and are expected to be lost or stolen, contact the IRS office who can help issue a replacement check.

More resources

Popular tax software – TurboTax review

Categories
Announcements

Valentine’s Day Book Deals and Linkstuff

Hope everyone is having a good Valentine’s Day and Family Day (in Ontario) weekend.  I’m visiting family and it’s going quite well (so far, but it’s early).

Mr. Cheap has a huge book deal – and not just any book deal. Harlequin romance!  I’ve always gotten really annoyed with Mr. Cheap when we get together and he always wants to talk about the latest Harlequin romance novel he has just read, but now I am starting to understand where he is coming from.  Kudos, Mr. Cheap….kudos.

Some Fave Links For The Week

Foodies Across Borders (an excellent food blog) wrote about a super simple peppercorn chicken pasta.  It looked so good that I emailed it to my wife (my way of hinting) and we ate it for dinner that night.  It was awesome and easy to prepare.  She added some green onion but otherwise followed the recipe.

Kyle from Amateur Asset Allocator wrote a great review of “4-hour workweek” by Tim Ferriss.  I haven’t read this book since I thought the idea of a 4 hour work week was ridiculous, especially when written by a guy who spends about 90 hours a week talking about how he only works 4 hours a week.  After reading this review I might just read it.

One of the funniest guys on the internet (Len Penzo)  wrote about how much a longer commute is worth in terms of extra salary.  I love my short commute and it would take a lot for me to agree to a long commute.

Canadian Capitalist wrote about the whole MLS, real estate anti-competition thing this week.  I’m cautiously hopeful that this will result in a better real estate environment by the time I sell my house in 45 years.

Financial Blogger says that the jig is up for Canadian income trusts.  It’s about time – I’m sick of hearing about how idiotic investors depend on an investment that gives them back lots of their own money on a regular basis.  You can do this yourself.  In fact, give me your money and for a small fee, I’ll give it back to you in whatever size “dividends” that you desire.

Some other pretty good links

The Oblivious Investor had a guest post asking Is Private Education a Good Investment? I’m not a big believer in the whole “good school” thing so you can probably guess which side I’m on.

Million Dollar Journey aka Kathryn had some frugal Valentine’s Day suggestions which are worth checking out.

Preet had some interesting thoughts about investing home bias.  It’s hard to believe that Canada is only 3% of world equity markets.  I guess currency is one reason to be overweight in your own country’s equity markets?

Money Matters talks about non-financial considerations when thinking about selling your home.

Some American tax articles

PT Money went on a guest post frenzy this week – he wrote about:

Debt Free Adventure has determined 11 of the most commonly missed tax deductions.

Moolanomy compiled a pretty good list of American tax articles which feature tax tips for 2009 Tax Year.

Carnivals

Fun Tax Facts – Carnival of Personal Finance #242

Festival of Frugality #215 « Pragmatic Environmentalism

Tax Carnival #64: Groundhog Day – Don’t Mess With Taxes

Money Hacks Carnival #102: Build a New Blog Edition | Passive Income Now

Should You Prepare Your Tax Return By Hand Or Use Tax Software?

Categories
Personal Finance

Can Customer Service Be Too Good? The Swiss Chalet Story

One of the oldest mantras of customer service is that the customer is always right.  I doubt very many companies actually follow that idea since it clearly can’t always be true.  And even if it is true then the company still has an obligation to the shareholders to maximize profits even if it means losing some clients.

A few months we ordered take out dinner from Swiss Chalet which is a very yummy Canadian chicken place.  My wife ordered a family pack which is a whole chicken, 4 fries and some buns.  Because it was near the holidays they had a special where they include stuffing and cranberry sauce for another couple of bucks.  My wife is a big fan of stuffing so she got the holiday special.

We picked up the dinner and everything was great except they forgot to include the stuffing!  I didn’t care but my wife did.  I suggested that she phone and complain – perhaps they would give us 10% off next time.  She entered a complaint online and surprisingly enough someone called the next day and said that we could get another holiday family pack for free!  I was quite surprised since I didn’t think the omission of some stuffing was worth it for them to give us a $28 dinner for free.

As I expected we had the usual problems claiming “the prize” since the outlet we went to had no idea about this freebie we were supposed to get.  Eventually we got it sorted out and had another great meal.

Personally I thought this was overkill.  They could have just given us 25% off and that would have been good enough.  I’m not complaining of course, but I think if you are going to run a business then you shouldn’t give too much away.

Tim Hortons (another Canadian institution) was in the news this week when they literally banned a customer who kept returning coffees because they were bad.  From the description in the article it sounds like they were very patient with the guy but eventually they just decided to cut rope and move on.  This makes a lot of sense to me and the only part of this story that is hard to understand is why the guy (who was banned) is complaining about it.  Tim Hortons is really just preventing him from buying more coffee which is something that he should have done himself.  Ie if you don’t like the product, then don’t buy it.

Maybe “the customer is always right” should be changed to “the profitable customer is always right (most of the time)”.