This Scottsdale tax update involves a number of changes to take into consideration before filing your 2016 income tax returns. And despite the changes, overall there aren't too many variations in the preparation of your 2016 income tax returns compared to 2015. However, there are a few important considerations for you to take note of to make sure you're filing as accurately and efficiently as possible this year – especially if you're planning to get a tax refund.

One important Scottsdale tax update of which to be aware is that taxpayers will have three extra days to file their returns this year. April 15th falls on a Saturday, and when that occurs the tax deadline is extended to the next business day, ordinarily Monday, April 17th. However, April 17th is the day the District of Columbia recognizes Emancipation Day. So the tax deadline will be Tuesday, April 18th.

The various tax deductions and filing rules are essentially the same as last year. The difference will be in the tax brackets, which were adjusted for inflation. So, as one CPA put it, don't necessarily assume that what you did last year can be relied on this year. Consult the tax tables carefully.

This Scottsdale tax update addresses several changes to be aware of.

This Scottsdale tax update addresses several changes to be aware of.

The mileage rate is lower. Tax regulations allow for tax advantages for using your personal vehicle for business, charitable, moving or medical purposes. You are able to deduct the actual costs involved, or use the mileage rate as prescribed by the IRS, whichever is greater. For 2016, the rate for business mileage is 54 cents per mile, 3.5 cents lower than it was in 2015. For medical or moving expenses, the rate is 19 cents per mile, down from 23 cents in 2015. The mileage rate for charitable purposes remains the same at 14 cents per mile.

There could be a delay in receiving your refund. If you are claiming the Earned Income Tax Credit or the Additional Child Tax Credit, expect your refund to be delayed in order to give the IRS more time to investigate errors and fraud in claiming these credits. Blame the delay on a new law, Protecting Americans from Tax Hikes, passed in 2015.

If you need help from the IRS, you will need an appointment. The IRS taxpayer assistance centers no longer accept walk-ins. Simply call in advance to make an appointment and help will be available.

Your income tax bracket may have changed. Income levels for all tax rates have been adjusted slightly to reflect the results of inflation. Consult the new tax tables.

Your personal exemption has been raised. In 2016, the personal exemption has been increased from $4,000 to $4,050. For taxpayers with an adjusted gross income of $259,400 for single filers and $311,300 for a married couple filing jointly, the exemption is less. The exemption is not available for taxpayers with an adjusted gross income of $381,900 filing as a single taxpayer and $433,800 for couples filing jointly.

You may get a larger Earned Income Tax Credit. Another Scottsdale tax update is for taxpayers who have three or more children. The maximum credit for their 2016 income tax returns is $6,269, compared to $6,242 in 2015. The formula for the tax credit includes several factors, including income and the number of dependents.

You'll pay a larger penalty if you weren't covered by health insurance. If you don’t have health insurance, you’re going to be penalized – again – to the tune of $695 per adult and $347.50 for each minor child. Good news, though… the maximum household penalty is $2,085. Still, according to IRS officials, most families won’t actually owe the IRS any money, thanks to over 30 existing exemptions already in place.

If you won money in the Olympics or Paralympics, you may not have to pay taxes on the winnings. Normally, if you win money or prizes in a contest or a lottery, you have to pay taxes on those winnings. If your adjusted gross income is less than $1 million ($500,000 if married filing separately) you won’t have to pay taxes on your winnings from the Olympics or Paralympics. Thank Congress for a new law that was passed last year.

If you owe enough back taxes, you may lose your passport. The U.S. State Department now has the right to revoke your passport if you owe more than $50,000 in unpaid taxes. This is due to a 2015 transportation regulation called the FAST Act. Insiders say the IRS so far hasn’t provided back taxes information to the State Department, but expects to do so later this year. So, if you plan to travel abroad in the future, you better make sure you’ve paid your taxes.

You can find more articles pertaining to Scottsdale taxes in the Taxes section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.

During a Scottsdale home inspection, it’s not unusual for issues to arise which need repair or replacing. Many times, it can mean a return to the negotiating table so the buyer and seller can hammer out the details of who’s going to fix what – or how much of a credit the seller is planning to give the buyer. When a home inspection discovers items needing to be addressed, consider these three tips to negotiate repairs.

Ask the seller to give you a credit for the cost of the work to be performed. There are several reasons for asking for a credit rather than having the seller have the required work done. First and foremost, the seller has likely lost interest in performing work on the home, regardless of the findings of your Scottsdale home inspection. After all, the contract is signed and even though there are issues pending that need to be negotiated, most sellers are too focused on buying and moving into their next home. Secondly, if you can get the seller to give you a credit against the sales price you can use that additional savings to have the work done yourself – with you being the new homeowner and with the work being done to your satisfaction. Thirdly, with a credit at closing the issue of repairing or replacing certain items falls squarely on your shoulders, keeping it simple and not involving the seller to ensure the work was being done.

Keep these items in mind as you prepare to negotiate after your XXX home inspection report.

Consider long-range planning. Keep future repairs or renovations in mind when negotiating with the seller. For example, if there are water stains on the ceiling that occurred as a result of a leak, ask the seller for a credit to repair both the leak and repainting or repairing the ceiling. You may elect to repair the leak, but put off fixing the stain until later – especially if you know you’re going to replace the existing stippled ceilings with a smoother treatment. Keep those and other items in mind as you prepare to negotiate on the heels of your Scottsdale home inspection report.

Don’t let others “see your hand.” In a card game, it’s important not to let others see your cards because it will give them an unfair advantage and change the way they play the game. Use the same strategy during your Scottsdale home inspection. If you say too much to the listing agent about your likes and dislikes or about your plans for decorating certain rooms and how excited you are, you could lose your negotiating power. The listing agent may tell the seller, and it could affect the outcome of the credit they were thinking about giving you. For example, if you tell the listing agent you plan to completely re-do the entire kitchen, the seller may find out about it and be less inclined to give you a credit for repairing the kitchen cabinets or replacing a dishwasher. Don’t reveal your plans. Keep a “poker face.”

It’s probably good to mention here that you should always insist the sales contract be contingent on the home “passing inspection” by way of a Scottsdale home inspection report showing no discernible repairs that should be made. If you don't include that in the contract and make the assumption you can always come back and revisit or negotiate certain issues after the inspection, you may be unpleasantly surprised.

In the event the property inspection is completed without any mention of needed repairs or other shortcomings, that's good. There’s no reason for further negotiating. However, if there are items that need to be addressed and the contract doesn’t mention what to do in such a case, you’ve lost your negotiating power and may force the seller to consider other offers or back-up contracts if you elect not to move forward.

With that in mind, enter into the closing with a full awareness of what can happen. In the sports world the old saying, “It ain’t over ’til it’s over” means anything can happen while the game is still going on. It’s the same in the real estate world – a deal isn’t completed until the money goes from the buyer to the seller and the deed to the property is transferred properly. The lesson here is: “Be alert, stay on your toes and keep your eyes wide open.” Anything less than that and you run the risk of losing your negotiating advantage and making your home buying experience less than what it could be.

Don’t give “buyer’s remorse” any opportunity to enter the picture. Be happy and satisfied with your purchase. You’ll enjoy it that much more!

You can find more articles pertaining to Scottsdale home inspections in the Scottsdale Home Inspections section of our site below Scottsdale Real Estate Categories in the column to your right. We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.

Making the Scottsdale real estate news outlook is the recent policy from the Trump administration that it had reversed one of the eleventh hour decisions made by the outgoing Secretary of Housing and Urban Development (HUD). The reversal involved the reinstatement of a cut in the Federal Housing Administration (FHA) annual insurance premium. The new administration stated the need to take a closer look at the premium reduction, saying the cut will increase the risk that U.S. taxpayers take on should there be a housing crisis like the one we saw nearly a decade ago. Detractors against the administration’s move say the FHA’s insurance fund is substantial and is positioned to provided mortgage borrowers a benefit by way of the premium reduction.

FHA borrowers usually are those who are the least flush with cash. As a result, the FHA program is tailor-made for homebuyers who are unable to afford more than a modest down payment – requiring the FHA’s mortgage insurance. With a qualifying FHA loan, a borrower can put down as little as 3.5%. Conventional lenders also offer low down payment lending programs requiring private mortgage insurance (PMI) and generally higher FICO credit scores than their FHA counterparts.

The Scottsdale real estate news outlook for 2017 is that it will cost you more this year than in the past.

The reversal of the premium reduction is expected to impact borrowers who already may be on the borderline of being able to qualify. The higher monthly payments created by not having the insurance premium cut will equate to approximately a .375% rate increase for prospective borrowers seeking FHA loans. That, coupled with the recent rise in interest rates after the presidential election will mean that the cost of buying a house – for many people – will increase slightly during the early spring of 2017.

In the Scottsdale real estate news outlook, while interest rates spiked as a result of the stock market’s rise post-election, they seem to have settled somewhat during the holidays – only to slightly rise again in recent weeks. While economists are split on whether rates will continue to rise throughout 2017 and by how much, most seem to agree that mortgage interest rates will not exceed 4.25% during the year. If that happens, although it will signal rates of slightly more than 1.25% higher than the all-time record lows experienced in much of the previous 12-18 months, the rate will still represent a relatively low interest rate for which to pay to purchase a home.

Of more concern than interest rates is the cost of the price of a newly-constructed home. In December, the Scottsdale real estate news outlook showed that the average price of a new home increased by over 7% compared to the same month last year. The prices reflect – for the most part – increased costs builders face in two key areas: the cost of land and the availability of labor. The cost of labor and the availability of labor are items which are less likely to improve during the new administration, as much of the homebuilder workforce is comprised of immigrants. In a recent survey by the National Association of Home Builders (NAHB) 78% of builders cited labor as their most pressing problem – and 82% felt it would be worse in 2017.

In addition, the other factors affecting the housing market as mentioned in the Scottsdale real estate news outlook recently has been the real estate market’s continued lack of sufficient inventory. The number of homes on the market for sale will likely mean the supply won't meet the demand again this year, making for another seller’s market in many of the more popular real estate markets throughout the U.S.

Lastly, as home values continue to appreciate – possibly not as rapidly as they did during 2016 – that means the number of homes on the market for sale will be priced at a premium. Real estate experts say the average appreciation rate of homes in the nation is expected to be in the 5% range, with some markets being higher and some lower. That’s slightly lower than what occurred in the 2015-2016 real estate markets, when housing values are at rates nearing 6% in some hotbeds, while averaging nearly 5.5% nationwide.

While the jury may still be out on factors such as interest rates, it does appear that the prevalent Scottsdale real estate news outlook for 2017 is that if you’re in the market to purchase a home, it’ll cost you more this year than in the past. However, the market appears to be poised and ready for what will probably be a good year for the real estate industry. The spring selling season will soon be here, giving buyers and sellers a much better idea of what to expect for the remainder of the year.

See more articles pertaining to the most current Scottsdale real estate news outlook in the section of articles on Scottsdale Real Estate News just below Scottsdale Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.  

The Scottsdale real estate outlook includes an update on what millennials have been doing lately. In recent years, millennials have been largely thought of as a generation of renters. They’ve unfairly received this moniker because of a number of factors, none the least of which is that home prices throughout the U.S. have consistently grown faster than wages. However, an improved and lowered cost of living combined with better job growth and rising incomes has led and will lead to many millennials beginning to buy houses.

Four areas in the Scottsdale real estate outlook designed to attract millennials.

According to real estate market research findings, last year nearly half of the total number of homebuyers were first-timers – and the majority of those were younger Americans aged 18 to 35 – millennials, by definition. All indications are for 2017 the percentage of millennials entering the housing market will continue to increase.

During the third quarter of 2016, the U.S. Census Bureau reports that home ownership was at 63.5%, slightly higher than the second quarter in which the 62.9% home participation rate was the lowest in 51 years.

Let’s examine four areas in the Scottsdale real estate outlook designed to attract millennials as they enter the home-buying market.

More and better amenities.
Millennials have come to expect and appreciate added extras in the apartment complexes in which they were living. It’s natural for them to want to have some of the same perks in the home or neighborhood in which they are thinking of moving. Examples are having larger bandwidth capabilities for social media and streaming music and videos and equipping homes with programmable thermostats and built-in USB outlets.

More search technology.
Millennials have also relied heavily on available resources in this information age. Today’s prospective homeowner almost always begins his search online. As such, they will continue to expect to be able to perform a variety of services remotely – either via an app or some other process – allowing them to negotiate and sign documents without leaving their homes or jobs.

Greater full-service offerings.
Given the number of millennials entering the housing market, the traditional role of a real estate agent is starting to change. The information age has provided consumers with a wealth of information about homes for sale. The missing piece seems to be how to aggregate or compile that information. Many real estate firms have chosen to provide better full-service offerings by not only assisting in finding or selling a home, but in addition, putting the client in contact with contractors or others to make the moving process smooth and easy for all involved.

Say goodbye to the “hard sell.”
With the focus more on full-service, as mentioned above, one of the changes in the Scottsdale real estate outlook will likely be that real estate agents will be able to concentrate less on the actual sales process and more on building relationships with their clients. Some real estate firms actually have prospective clients – both buyers and sellers – meet with a customer service manager first before they’re assigned to an agent. The firms report that this first point of customer interaction enables the prospective buyer or seller to do their fact-finding from a completely impartial source – without feeling like they were being “sold” anything. It’s more of an information exchange designed to make their prospective clients feel at ease in the early stages of the process.

As the Scottsdale real estate outlook continues to evolve and more millennials and other prospective purchasers enter the home buying arena, more changes are likely to occur. New homes currently under construction will probably have more open areas where families can be together in the same room enjoying the same activity, but yet be able to stay connected to their friends and others via their smartphones or tablets. In addition, homes will likely be built with smart-car garages equipped with electrical outlets for hybrid automobiles. Energy-efficient homes will become the norm as builders will attempt to woo millennials interested in being more environmentally conscious and more focused on sustainable, clean energy solutions.

The challenges in the Scottsdale real estate outlook continue to be basic housing shortcomings we’ve heard and read much about in the last 18-24 months. The number of available affordable housing units for sale still continues to lag behind normal levels. With this low inventory comes the added pressures of existing homeowners who would have normally been ready to sell and move up into a bigger, better or newer home, who have decided not to sell – simply because there are fewer homes available for them to choose from, too. Added to that dilemma is the continued rise in home prices. Most experts expect home prices across the U.S. to increase between 4.50% to 5.5% during 2017. So, the homes that are available for purchase will likely be more expensive than ever – the limited supply will probably continue to fuel what will be a seller’s market.

In addition, interest rates – mortgage rates in particular – are expected to rise during 2017. We’ve seen a slight uptick in rates since the presidential election, as a result of the growth of the stock market. Analysts say interest rates will continue to rise throughout 2017, but longer-term mortgage rates will probably not exceed 4.5%. While those rates are higher than the near-record rates of the previous 12-18 months, comparatively speaking an interest rate of even 4.5% to 5% is still a very good, affordable way to borrow money for the purchase of a home.

Despite the challenges on the horizon of the Scottsdale real estate outlook, 2017 looks like it has the potential to be a good year. The coming spring selling season will be the first test. If that’s successful, it could set the stage for a continued optimistic feeling on which the rest of the year will be based.

See more articles pertaining to the Scottsdale real estate outlook in the section of articles on Scottsdale Real Estate just below Scottsdale Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Now that a new President sits in the oval office, the Scottsdale economic outlook is on the minds of people in the real estate industry as we enter 2017. Let’s look at three component parts of the economy and how they relate to each other – and what to expect in the real estate market for 2017.

The Stock Market

 The Scottsdale economic outlook is for gradual improvement in all areas of stocks, housing and oil.

Most of the “experts,” if there is such a thing, say they expect modest growth in the market with at least a chance of a correction occurring sometime during the year. Recently, more than a dozen Wall Street firms predicted the S&P 500 index of U.S. large-cap stocks will hit a record level of 2,363 – a growth rate of 5.5%. Analysts say President Donald Trump’s platform of lower corporate taxes, fewer business regulations and increased infrastructure spending has given investors reason to be more optimistic than in recent years.

The S&P 500 started 2016 at slightly over 2,000 and ended 2016 at 2,239 – a return of 9.84%. Actually, including dividends in the mix, the true return was approximately 12.25% – despite a dip in prices right before the end of 2016. The market’s positive attitude is largely the result of the new administration’s promises to be “pro-growth.”

Detractors point to the concern that stocks are overvalued and the bull market will be short-lived. In addition, a strong U.S. dollar could potentially be responsible for fewer jobs if American products are priced too high for global buyers. Nevertheless, just a few days into the Trump presidency, the feeling of optimism on Wall Street continues

Oil Prices
The Scottsdale economic outlook for oil prices in 2017 is for slightly more of the same experienced two years ago in 2015. It’s expected the average price of a barrel of oil will be $52 this year, as forecast by the U.S. Energy Information Administration. That’s nearly $10 more per barrel than the 2016 average price of $43. Crude oil averaged $52 a barrel in 2015.

At over $100 a barrel, oil prices reached an all-time high between 2011 and 2015. The advent of cheap fracking technology throughout the central U.S. was largely responsible for bringing the prices back down in 2015. The additional deposits enabled the U.S. to become an oil exporter – a first in more than nearly 40 years.

Gas Prices
During the first few weeks of 2017, Americans were paying an average of $2.34 per gallon of regular gas – the highest price since 2014 – according to the Automobile Association of America (AAA.) This time last year, the average pump price as $1.99 per gallon. While there is no direct connection between crude oil prices and gas prices, they certainly are related. AAA says that pump prices are affected roughly 2.4 cents per gallon for every $1 movement in the cost of a barrel of crude oil. The Scottsdale economic outlook for gas prices is for pump prices to average $2.10 per gallon in February and as high as $2.30 throughout the rest of 2017. The relatively cheap price of crude oil in 2016 enabled U.S. drivers to pay an average price of $2.14 per gallon of regular gas.

The Housing Market
So, what does all this mean for the housing economy in 2017? More of the same, according to the experts. And that’s a good thing – relatively speaking. CoreLogic, a real estate industry research firm, predicts home values will continue to rise throughout 2017 – at a rate of around 4.7%. Redfin, another online brokerage research firm, forecasts the growth in home prices slightly higher at 5.3%, citing homebuyer demand as being higher today than this time last year.

CoreLogic says home prices increased 7.1% between November 2015 and November 2016. Despite that impressive growth, the increase still ranks approximately 4% less than it was during its peak in 2006. The percentages are averages and area adjusted for inflation.

The Scottsdale economic outlook calls for continued tight inventory challenges. Fewer homes for sale in the marketplace leads to higher prices for those homes on the market – a classic example of supply and demand. When supply is scarce, demand is high and prices are, too. The tight inventory is expected to be especially impactful on first-time home buyers. In addition, as interest rates have increased slightly since the presidential election – and are expected to increase again, leveling off at between 4.2% and 4.7% in 2017 – the cost of mortgage financing will increase, too. However, relatively speaking, interest rates will still remain affordable – just not as affordable as they were 12-18 months ago.

In addition, contributing to the lack of housing inventory, recent research shows that U.S. homeowners with mortgages at lower fixed rates of 4.25% or less are likely to remain in their homes. These homeowners are less apt to sell their homes than their counterparts with higher interest rate mortgages. Although new construction is brisk, it appears to lack the firepower to produce a sufficient number of affordably-priced homes quickly enough to make an impact during 2017.

As usual, the combined effect of these components of the economy will be the determining factor in the Scottsdale economic outlook. If crude oil prices dropped, for example, creating lower gasoline prices, the resulting optimism could be encouraging for the housing industry. Builder confidence would rise, giving them greater opportunity to build more homes at volumes that would make them more affordable. Likewise, a leveling off of the stock market during 2017 would likely mean that U.S. Treasury bond yields would become a popular investment once again, giving the American consumer confidence interest rates would stabilize – making borrowing money more affordable – regardless of what home prices do or don't do.

The bottom line is this: The Scottsdale economic outlook is for gradual improvement in all areas mentioned. There seems to be an optimism in the new administration – although the jury is still out on what campaign promises will and won’t be delivered. As always, time will tell. In the meantime, there’s every reason to think that housing will be at least as good as it was in 2016 – despite the inventory challenges, higher prices and slightly more expensive credit.

You can find more articles pertaining to the Scottsdale economic outlook in the "Economy" section of articles just below Scottsdale Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and following us on Twitter.