Frequently Asked Questions

 


In this section you will find a full list of questions and answers provided by our specialized staff.

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  FAQ’S – ACCOUNTING & TAXES

1)  How much do I need to pay in taxes when I sell my home?
            If you sold your main home in 2008 or 2009, you may be able to exclude from your income any gains up to the limit of $250,000 for a single person and $500,000 for a joint return.  If you are able to exclude all your gains then you do not need to report the sale on your tax return.

2)  I work in my home part time.  Can I take the home office deduction?
            If you run a business out of your home, you can often claim a deduction on rental or mortgage costs, as well as some depreciation for the portion of the home used for business.  You can also deduct some related costs such as utilities, insurance and remodeling.

3)  When is the best time to refinance?
            It depends on how long it will take you to reach your breakeven point and the time horizon for you to stay in the house.  The breakeven point is the time it takes you to make up in monthly savings what you paid in fees.  To calculate your breakeven point divide the mortgage fees by the monthly savings.
For example, let’s say you would save $200.00 per month by refinancing and the closing costs add up to $4,000.00.  In this scenario it will take 20 months to breakeven, so if you plan to stay for more than 20 months in the house then perhaps it is wise to refinance.

4)  What types of educational expenses are deductible?
            Educational expenses that are deductible are the amounts spent on tuition, supplies, laboratory fees, as well as corresponding courses, transportation and traveling expenses.

5) What should I do if I made a mistake on my federal income tax return that I have already filed?
            This depends on the type of mistake.  Many mathematical errors are caught in the processing of the tax return.  If you forgot to attach a required schedule the internal revenue service will contact you for the missing information.  However, if you did not report all of your income or did not claim a credit, then you are entitled to file an amended or corrected return using Form 1040X.

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  FAQ’S – INSURANCE

1)  Why are our prices very affordable and competitive?
            The reason our prices are affordable and competitive is that we are an Independent Insurance Agency; meaning that we can shop among a vast selection of insurance companies to obtain the best coverage at the best price with highly reputable insurance companies.


2)  How much does the medical exam cost when I buy life insurance?
            There is no cost to you; the life insurance provider pays all the fees for the medical exam.

3)  What is workers compensation?

            This coverage is used to comply with state laws.  Under this requirement, an employee can be compensated if he or she is injured while working for you, regardless of whose fault.

4)  Why is it important to buy renters insurance and How to buy it?  
            It is important to buy renters insurance because a landlord’s home policy will not cover tenants’ possessions or any liabilities they might incur.  Before buying renter’s insurance take inventory of what you own.  Make an itemized list of all of your belongings along with a price estimate, serial number, receipt and purchase date for each item.  Such inventory will ensure that you purchase the right coverage for yourself.

5)  I rent out my basement.  Are my tenants covered by my homeowner’s policy?
            NO.  Your property and the structure are covered by your policy as well as your personal liability; however, the tenants’ possessions and liability are not covered by your policy.  Therefore, they may wish to purchase their own renter’s insurance.

6)  What is general liability insurance and when should you use it?
           General Liability Insurance is a contractual relationship between a contractor and insurance carrier to reimburse a third party for property damages or personal injury losses caused by the contractor.
When you own a business or work for yourself general liability is a necessity.  This type of policy provides coverage for your business if an individual or another business claims your company or your employee was negligent and responsible for bodily injuries, property damage, financial loss, personal injury or advertising injury.  General Liability insurance has become an essential safeguard against litigations that could ruin your business.  It is always good to check with your insurance agent for more details.

7) What is SR-22, when do I need it, and for how long?

SR-22 or Financial Responsibility Insurance is a method used by the Secretary of State to monitor the insurance of individuals who have certain traffic violations.  SR-22 is actually a certificate of insurance filed by the home office of an insurance company directly to the Secretary of State; otherwise it is like most other auto insurance policies. 

The most common reason an SR-22 filing is requested is due to a driver’s lack of auto insurance as mandated by state law.  Other reasons you might need SR-22 are: having a license suspension or revoked license, repeat traffic violations or compiling too many tickets in a short period of time, at –fault accidents while driving without insurance, or any serious moving violation including DUI or DWI.  Generally, you are required to maintain an SR-22 policy for at least 3 years.

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  FAQ’S – REAL ESTATE

1)  How do I choose a property to buy?
            Whether you need to live in the property or you are buying it for its resale value, you need to try to find property in a location that is going to appreciate the most.  Therefore you need to stick to the most common phrase in real estate literature which says “Location-Location-Location.”

2)  What is a short sale?
            A short sale is when a lender accepts a discount on a mortgage to avoid possible foreclosure, auction, or bankruptcy.  Basically, you are buying the home from the lender at a discount.

3)  How do I know if I am ready to buy a home?
            When considering buying a home you must have a steady source of income, a good record of paying your bills, few outstanding long term debts, money saved for a downpayment (at least 20% of the home price is advised), have the ability to pay the mortgage and other additional expenses.  If you lack one or more of these requirements, then you should seriously reconsider before buying a home.

4)  Is an older home a better value than a new one?
            There is no definite answer. One should evaluate each house for its individual characteristics.

5) Do I really need Homeowner’s Insurance?
            YES.  You need to protect your assets and a paid homeowner’s insurance is required at the time of closing.

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