RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

How to Repay Debt with a Tax Refund

March 12, 2015 1:54 am

This year, the majority of taxpayers (68 percent) would prefer to pay down their debt with a tax refund instead of growing their personal savings, according to a recent poll by the National Foundation for Credit Counseling® (NFCC).

The NFCC poll found that some taxpayers will use their refunds to pay for basic necessities (15 percent). Others indicated they’d use the funds to grow their savings (11 percent) or to have fun shopping or take a vacation (2 percent). Just four percent of respondents did not know how they would use the refund.

While there are a number of good reasons to become less dependent on tax refunds, it is wise to have a plan ready. In 2014, the average tax refund for individual taxpayers was $3,034 according to the IRS. Compare that to the average credit card debt of $5,047 for adult consumers with credit cards in the previous year, according to a report by CreditCards.com. If the average refund amount were entirely committed to the repayment of the average credit card debt, it could pay it down by more than half.
The NFCC encourages taxpayers to consider the following tips when deciding how to repay debt with their refund:
  • If the debt is costing more than what is being earned from interest on savings, debt repayment should be considered as the top priority.
  • If committing the entire tax refund to repay a debt does not completely erase the balance owed, a plan should be in place to accelerate the payoff of the remaining balance.
  • If using the refund to settle a debt for less than the balance owed, be prepared to pay income tax on the amount forgiven by the creditor.
  • To pay less interest over time, focus on eliminating the higher interest debts first.
  • Once a balance is repaid, avoid replacing it with new debt.
“The most important thing to consider is the impact that debt is having on quality of life,” says Bruce McClary, spokesperson for the NFCC. “Being in a position where savings has to be put on hold while debt takes center stage is not where consumers should be. Placing debt repayment on a faster track while reducing reliance on credit cards and loans will bring people closer to resuming progress toward reaching their personal financial goals.”

Source: NFCC

Published with permission from RISMedia.


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Homebuyers: Identifying Costly Repairs

March 12, 2015 1:54 am

(BPT) - When you're about to buy a house, it's easy to get excited about its great location, spacious floor plan or beautifully decorated interior. Before signing on the dotted line, use this checklist to help avoid some potentially costly surprises and anticipate repairs or upgrades that may be needed.

Roof
- Ask when the current roof was installed. Is it the original roof, or has it been replaced, repaired, or covered over with new shingles in certain spots? Are there known leaks, and if so, where are they? Have any of the leaks caused damage to the attic or interior? Also look at the chimney to see if it's properly sealed around the edges and whether the gutters need repair.

Windows and Doors
– Next, take a look at the windows to see if there is any condensation between the glass panes. If so, it could mean window replacements are in order. Once you get inside the house and close the front door, see if any light is coming through between the edge of the door opening and the wall. This gap is an indicator that the door may need to be replaced since air can escape through it and cause higher energy bills.

Lighting and Electrical
– Throughout the interior rooms, many homes are staged to appeal to buyers with attractive lighting that shows off the space to its best advantage. You may love the way the lamps look in the bedroom, office or kitchen, but more importantly, check out how many electrical outlets there are and whether they are in convenient locations. Also, make sure you check to see if the lamps are masking the fact that there are no ceiling fixtures in each room. Will you need to rig up extension cords or invest in electrical work in order to support all the lamps, ceiling fixtures, appliances and electronics you wish to use?

Furnace
– At the basement level, be sure to check out the heating system. If the current furnace is more than 10 years old, it may be operating at a much lower level of efficiency than the latest manufacturing standards require, resulting in higher energy costs. Newer models can operate at nearly 20 percent higher efficiency than the government minimum standard, for the ultimate in energy efficiency.

Published with permission from RISMedia.


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