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Best Places to Invest in Housing this Year

Posted on March 26th, 2017

Housing economists have put together the list of top cities to invest your money into the housing market with. These cities are predicted to have the best returns on them in the next few years. Generally speaking economists believe the best place to invest is in the South where there is the best balance of risk and reward, as well as affordability and local job growth. It is important to note, though, that these homes aren’t for traders looking to make cash fast. Instead, these homes and predictions are best for those looking to buy or rent out a home in the near future.

The best city to buy property in was Dallas, with the average home price being $233,000. Prices are expected to increase 31% over the next three years based on the job growth as well as population growth. Texas had two other cities in the top twenty, Fort Worth and San Antonio. Texas wasn’t hurt too bad by the housing crisis, allowing it to bounce back faster leading more people to move there in 2015 than any other state other than Florida.

Speaking of which, Florida is also one of the major players in the property investing industry with four cities in the top ten. Jacksonville, Orlando, West Palm Beach, and Tampa and all places to look at investing in during the coming year. Builder constraints and job growth has boosted the value of existing homes, making it a great investment.

One surprising city on the list is Boston. Major cities in California and along the East coast are often too expensive to be a top investment. In Boston, though, homes are underpriced by 2% and should increase 20% by 2020. If you are looking for a city in the Northeast to invest in, Boston may be the place for you.

Finally, though, it is important to stay vigilant and be careful when looking at homes to invest in. If the prices seem too good to be true, they probably are. After the housing market crash it was easy to scoop up foreclosed homes for cheap prices, but that is much less likely now. Unbelievably cheap housing usually comes about when the economy is in such terrible shape that investing there wouldn’t be fiscally ideal. Overall, though, what is most important is to weigh you options and make an educated decision about your investments.

For more information about the cities mentioned and others please visit: https://www.forbes.com/sites/samanthasharf/2017/01/10/best-buy-cities-where-to-invest-in-housing-in-2017/2/#1474572a7203


Canadian Snowbirds: A Strategy to Avoid Falling into the US Tax Residency Trap

Posted on February 24th, 2017

Many Canadians like to escape the cold winters for warmer temperatures in the US. You must be especially careful about how much time you spend in the US or you may be required to pay taxes, even if you aren’t a United States citizen. Don’t worry though! With a bit of knowledge and planning you won’t fall into the tax trap.

If you think you can get away with getting around this tax trap, think again! Border officials are sharing more information than ever, making it almost impossible to hide from the IRS.

Many Canadians have been misinformed about what constitutes residency in the United States. Some believe that if they stay in the US for less than 183 days they will be exempt from paying taxes and has caused serious issues for many Canadians. There are a few ways to avoid being considered a US resident for tax purposes.

The easiest way is to make sure you don’t meet the Substantial Presence Test. This test was created by the IRS to decide whether or not a person would be considered a resident. Under this rule you would be considered a US resident if you were in the United States for 31 days in the calendar year and 183 days during the past three years however the calculation is complicated as the number of days for each of the three years is weighted differently:

–  Current tax year each day is counted as 1 day.
–  Prior tax year each day is counted as 1/3 of a day.
–  Two years prior tax year each day is counted as 1/6 of a day.

 This means that if you spent 120 days in the US in each of the years 2014, 2015 and 2016 despite the fact that you had spent 360 days in the US using the formula you would not be over the 182 limit. From the calculation you would have spent 180 days in the US (120 + 40 (120/3) + 20 (120/6)) if the calculation is greater than 182 days, you must fill out a Form 8840.

The second way is to claim the closer connection exemption. Filing a form 8840 allows Canadians to stay in the US for up to 182 days every year without having to pay taxes as a US resident. There are a few requirements you need to meet to be able to receive this exemption. First, you must be present in the US for less than 183 days in the current calendar year. Second, you must have an established home in Canada. Finally, you must be able to establish a closer connection to Canada than the US. It is important to note that you don’t need a US tax identification number to file this form and it must be filed no later than June 15th the year after the year in which you qualified as a US resident for tax purposes.

Finally you can claim a Tax Treaty Benefit from the Canada – US Tax Treaty. If you do end up staying in the US for more than 183 days there is one last way in which you can be excluded from being considered a resident for US tax purposes. You must file a US Nonresident tax return and claim an exemption under The Canada – Us Tax Treaty. For this you must have an ITIN number and file not only a Form 1040NR but also a Form 8833 to claim the tax treaty benefit. This tax return must be filed no later than June 15 in the year following the year you qualify as a United States resident, if you don’t you may be subject to other penalties. While this process may seem arduous we at MyTaxAdvisorOnline are here to help you we would be glad to answer any questions you have on filing a nonresident tax return or any other nonresident tax issue

For more information on Canadian snowbirds and being considered a US resident please visit: https://www.snowbirdadvisor.ca/us-residency-rules-every-canadian-snowbird-must-know


US Property Market Bubbles: An Alternative Approach

Posted on February 15th, 2017

In the United States owning a home is often seen as an investment, and the expectation is that the value of your home will rise quickly. Americans don’t see a problem with housing prices increasing, but this really means that millions of people will have trouble buying a home in the future. This creates what is termed a ‘housing bubble’. These speculative bubbles occur when societies trick themselves into believing that something plentiful is actually scarce or soon will be.

There are a few reasons why this occurs. The federal government has funded programs that make housing cheaper but local laws often mitigate these programs by regulating lot size, making housing scarcer or capping the number of unrelated people who can live together. This, in turn, makes rent and home prices increase and restricts people from moving to places where there are an abundance of jobs and high wages.

Some economists say we should stop looking at homes as investments. When one buys a car they don’t expect to make money when they sell it, the same should go for houses. This would make housing prices decrease significantly in cities, with some projection a decrease of over 50%. This goes back to land use regulations. Allowing more homes to be built would drive prices down, making the economy grow in a multitude of ways. First, it would increase the sales of building materials and would increase jobs for construction workers. Second, it would increase wages. The ability for workers to move farther in search of job opportunities would increase competition, therefore increasing wages.

Most Americans don’t want to go all in on this type of housing market currently, but using this model as a jumping off point could help inform new ways to run the housing market and boost the economy.

For more information on this theory and more please visit: http://www.cnbc.com/2017/02/10/popping-the-housing-bubbles-in-the-american-mind.html


Trends that will Shape the Housing Market this Year

Posted on February 11th, 2017

Since the economic crash almost a decade ago lending standards have tightened and builders have been more cautious into increasing their operations. Experts believe that there are signs that these trends will begin to change this year.

The Federal rate setting board predicts that there will be three interest rate increases coming over the next year, but according to a Redfin economist this rate won’t get higher than 4.3% on the 30 year fixed rate. This may make it harder for prospective homeowners to buy affordable homes. But this is no reason to fret.

Millennials have been more attracted to medium-sized cities for the past few years because of their affordability. Many of these cities have been an increase of building permits issuance. This, coupled with the fact that construction of new homes has increased 5% in the past two years mean there will be more affordable homes to buy. Mortgage credit is predicted to become more widely available and the Federal Housing Administration will likely lower fees it charges first time homebuyers, making it easier for people to buy their first homes.

For more information on these trends and more please visit: http://fortune.com/2016/12/29/real-estate-trends-2017-2/


How to Avoid Phishing and Online Scams

Posted on February 2nd, 2017

In 2017 online scams have become so sophisticated that people find it difficult to differentiate between content that is safe and content that is potentially dangerous. Scammers use the IRS’s name as a way to get information out of unsuspecting individuals. Therefore it is important to know how to keep yourself safe online.

The IRS doesn’t initiate contact with taxpayers by email, text message or social media channels to request personal or financial information. This information is paramount when considering if something is safe or not. If you are contacted in the name of the IRS from any of the aforementioned ways it is most likely phishing. Phishing is a scam carried out through unsolicited emails and/or websites that lure unsuspecting victims to provide personal information about themselves.

If you receive emails or text messages that claim to be from the IRS DO NOT open any attachments in the email or click on any links. These could include malicious codes that will infect your computer! If you receive a letter that you are suspicious about you can search on the IRS homepage to see if the letter is legitimate or not. Receiving an unsolicited fax of a form such as a W8-BEN is another red flag, you SHOULD NOT fill it out and fax it back. Finally if you are suspicious of a caller claiming to be an employee of the IRS you should record their name and badge number and can contact the IRS (at 1-800-366-4484) to see if the person that contacted you is a true employee.

Keeping your personal and financial information safe is crucial. For more information on this and more please visit: https://www.irs.gov/uac/report-phishing


REMINDER: New US Law Requires ITIN Renewal: Find Out if you are Affected

Posted on January 26th, 2017

In 2015 the Protecting Americans from Tax Hikes (PATH) Act was passed. This act was enacted to safeguard against tax fraud and changes several tax laws. This law requires taxpayers who have not used their ITIN on a tax return for the last three years to renew their ITIN number before filing their tax return this year. Not renewing your ITIN number may result in delaying your tax refund so it’s important to know if you will be effected!

Individuals whose ITINs were issued prior to 2013 will be begin to expire on a rolling basis this year and will need to be renewed. The expiration of your ITIN is based on the middle digits of your number. Those with middle digits that are either 78 or 79 are the first who must renew their ITIN. You should have received a letter in August from the IRS with this information, if you did not please contact us!

If your ITIN doesn’t have the middle digits stated above you don’t need to renew your ITIN yet, but will at a later date. It is important to get this done early, because ITIN renewal takes about 7 weeks to complete.

If your ITIN needs to be renewed MyTaxAdvisorOnline would be glad to assist you in this process or answer any questions you have. For more information about ITIN renewal please visit our website at: http://mytaxadvisoronline.com/itinrenewal.php


What Experts Say About the 2017 Housing Market

Posted on January 19th, 2017

Just last week Forbes consulted with housing experts and economists to create its predictions for the housing market in 2017. Overall, last year was a good year for the market in the United States. Housing prices finally passed the 2006 peak while mortgage rates stayed low. For 2017 experts had a lot of predictions for a post-election America.

Economists at Redfin believe housing prices will continue to rise this year due to increasing homebuyer demand. Millennials, a group that have avoided the housing market in the past, are projected to begin buying and renting homes outside of the east and west coasts. Experts still believe, though, that affordable homes will not grow this year, making it hard for individuals who have median incomes or lower to find housing. This type of housing has decreased consistently over the past five years and has become a growing problem for the United States.

This year marks a transitional period for the United States politically. Donald Trump will be inaugurated on January 20th and his presidency may facilitate some changes to the housing market. In the short term these changes will have either a neutral or a positive effect on the housing market, but long term projections are still being debated. Last year mortgage rates went over 4% for the first time in two years. Experts have debated what will happen with mortgage rates in 2017. It is believed that rates will land somewhere between 3.75% and 4.6%. Policy changes by the Trump administration may increase mortgage rates at a volatile place, though.

Home building increased substantially in the final months of 2016 and is supposed to continue into 2017. Experts believe that this could help begin to close the gap between sellers and buyers this year. Sellers still will have better outcomes than buyers in 2017. In 2016 a typical home stayed on the market for only 52 days, ten days less than it would have in 2015. This trend is supposed to continue this year as well.

For more information on these trends and more please visit Forbes’ site at: http://www.forbes.com/sites/samanthasharf/2017/01/03/housing-outlook-2017-eight-predictions-from-the-experts/#15a335ad1ce2


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