Uncategorized – Page 2 – The Good Humored Accountant

May 15, 2020

A Fire Shut up in my Bones

I never really intended for this to be the space where I would share this sort of thing, but I feel somewhat like the prophet Jeremiah that I referenced in the title of this post. I have had a thought in my head for some two months now that I find often times distracting and I need to get it out. This, at the current time, is the only spot I have to share it. If I have enough of these, then maybe I will create another home for them.

A few months ago a friend of mine was sharing some communion comments at church and I wondered to myself, if I was asked, what would I even try and share. What novel idea could I bring that would highlight our communion time? I didn’t have one. A week or so later, I was prompted to revisit a book I hadn’t read in 10 years. It was there that the following message was highlighted. Sometimes, it is not the new message that needs to be shared, but the basic and easily overlooked.

He loves you. It’s as simple as that.

So often in religion, it’s easy to get caught up in the “shoulds”; I should do this, I should want this, I shouldn’t do that. Satan uses theses “shoulds” to drown out the simple message of Jesus Christ, The Father loves you. The message of Jesus is good news and we let it get covered up by the mundane-ness of life and how we think life should be. God loves you now, in this moment for who you are, not for who you think you should be. God, the Father, loves you now, in the brokenness you know, and the brokenness you don’t yet know. He knows your quirks, your bad habits, your struggles and doubts. He loves you, all of you. Are there things he would like to see you do differently? Undoubtedly. But that does not change this one simple truth: He loves you.

Luke 15 tells the parable of the Prodigal Son. As a quick summary if you aren’t familiar, the story revolves around one of the sons of a wealthy man who requests to receive his inheritance in advance and leaves his father’s house. The son proceeds to completely squander the wealth and quickly finds himself with nothing, scraping by feeding pigs who are eating better than he is. The son decides to return to his Father’s house, and beg to be a servant, since he knows servants in his father’s house are treated better than his current circumstances are treating him. He returns to his Father and he is welcomed back not as a servant, but as the son he is, despite previous actions.

But there is a great verse in Luke 15 that I had somewhat skipped over in the number of times I have read this story. Verse 20: “While he [the son} was still a long way off, his father saw him and felt compassion, and ran and embraced him and kissed him.” This is beautiful. The son, in his regret and shame, has worked up an apology he intends to offer to his father with the faint hope his father will show him the slightest mercy and take him back as a servant. This isn’t what happens at all. He doesn’t even get the chance to give it. Instead, out of the love the Father has for his son, He runs to his son and embraces him for the Father has his son back, no apologies. The son offers the apology but it falls on the ears of an overjoyed father holding his son, ready to celebrate the reunion.

This is the illustration that Jesus provides to demonstrate the good news he brings. We have a Father who loves us from a long way off, not because of what we do or don’t do, what we could be or what we aren’t, but because He is who He is. The Father who loves.

There is another son in this story, one who is always by his Father’s side, and one who is not excited about his brother’s return. The Father reassures this brother as well, that his own place has nothing to do with his brother’s return. He has the Father’s love as well. In my youth and arrogance, there was probably a time I saw myself in the shoes of the older brother, knowing I should have compassion on those who find their way back. But as I have grown older and hopefully a little bit wiser, I realize just how far off I really am from the Father, and I’m thankful that He runs to me while I am still a long way off. He loves me.

October 30, 2018

10 Ways for New Homeowners to save money on their Taxes : Way #1 – Your Mortgage Payment

You have decided to become a home owner…Congratulations! Most people are very excited when they buy their first home, with good reason. You have succeeded on huge decision and have a space to make your own. Others may be thinking:

Most people never think of the tax advantages now available once they become home owners.

One of the difficult parts of my job is not being able to answer questions simply. Nearly anytime one of my friends says, “Hey, I have a tax question. Is _____ deductible?” The vast majority of the time my answer is “It depends”. Nearly everything in the tax code is subject to some stipulation, income limit, or other qualifications. If you actually read the forms, it is like trying to follow the most lame “Choose your Own Adventure” book ever. The end of every story is “You owe more money”.

Following in this post and others to follow are a few areas where home owners can save money on their taxes. As always, these are general suggestions and may not be applicable to everyone. Pretty much every thing in the tax worlds can end with that disclaimer.

Mortgage Interest

For all of the excitement that owning a home brings, the downside is that it comes with a monthly mortgage payment. In case you are brand new, your mortgage payment is one payment that is generally paid to your mortgage lender to fund some of the costs of you home ownership. Your mortgage payment is generally a combination of 3 different payments sometimes 4 depending on your loan. It is always split between amounts applied to principle and interest and then usually another piece for escrow items. We’ll cover escrow in a minute. Depending on your loan situation, you may have a 4^th piece that is for mortgage insurance. The portion of your payment designated as interest is deductible as an itemized deduction on your tax return. It is often one of the biggest deductions that people have.

Itemizing – what does that mean. When it comes to deductions on your tax returns, there are 2 primary categories: business and personal. Business expenses specifically reduce business income. We’ll go over those another time. For your personal expense, the IRS allows you 2 options: You may take the “standard deduction “or “itemize” your deductions. The standard deduction is a per person amount that is pre-determined. If you have specific expenses that exceed the standard deduction, you can file Schedule A and provide an itemized listing of these expenses. Mortgage Interest falls here.

Real Estate Taxes

Local municipalities generally assess a tax on real estate and the property owner is responsible for paying it. Most new homeowners pay this tax as a part of their mortgage payment. It is one of the things that is paid through the escrow account. The escrow account is an account with your mortgage holder where they administer certain funds to pay necessary costs of the home that protect their mortgage security. The funds you put into escrow are usually used to pay your real estate taxes and home owner’s insurance.

Real estate taxes are paid annually and are also deducted as an itemized deduction on Schedule A, just like your mortgage interest that we discussed earlier.

So here is the new downside about Real Estate Taxes, as a part of the recent Tax Cuts and Jobs Act, deductions for local taxes are limited to $10,000. Real Estate taxes are a piece of that. That sounds like a pretty generous deduction that most first time home buyers wouldn’t need to worry themselves with, except that other state income taxes are also included in this limitation. If you live in a state that has an income tax, it is pretty easy to hit that phaseout, especially if it is a state like New York or California that imposes a relatively high income tax combined with relatively high property taxes.

Mortgage Insurance Premiums

These have been around for a long time but really came to the forefront after the bottom fell out of the real estate market starting in 2008. Banks experienced dramatically higher rates of foreclosure and in order to help protect their exposure, began requiring more borrowers carry mortgage insurance. In most cases, unless you make a down payment of at least 20% of the cost of your house, you will be required to also pay mortgage insurance. Since more people were foreclosing, the rates on this insurance increased dramatically. As a way to help homeowner’s, Congress allowed this insurance premium to qualify as an itemized deduction. You are disallowed from taking this deduction if you are deemed to make too much money. We in the biz call this a “phaseout”. For a couple filing a joint return, it was $110,000 for 2017.

That covers all of the deductions incorporated into your new monthly payment. Generally most lenders will report all of these numbers on your annual Form 1098 mailed to you at the beginning each year. Each number is in a different box on the form. On this form moving forward, you will also find the balance of your mortgage, which becomes important if your balance is over $750,000 and didn’t originate before 2017. All of this should help put a little more money back in your pocket which is what this blog is all about. If you have any thoughts or questions, please leave me a comment below. I will follow up with you there, or potentially through a future blog post.

June 21, 2018October 30, 2018

Welcome

Thanks for visiting! This is a blog for curious students who want to learn a little about finance and have some fun doing it. Or its a blog for those in need of a chuckle with some knowledge on the side. Either way, I’m glad you’re here and hope you have a good time. Peruse the site, leave a comment, ask a question. I’ll be happy to answer.