Striving to create a better life for everyone by sustainably solving real estate problems

(512) 807-8777

Tag Archives: Taxes

Tax Plan Update: Corporations vs. Pass-Through Entities

Scissors cutting the word TAX

The language of the current tax proposals is changing daily, if not hourly. The Senate plan currently has any benefits accruing to the middle class or small businesses expiring by 2025. Why? Why do you think?

No matter which party is in power, I’m always nervous when they start meddling with the tax code. Everybody agrees that we need tax reform; it’s just that we can seldom get two people to agree on just how that reform should look. If you ask three members of Congress, you’ll get at least five answers.

The “tax cut” bill currently before the Senate dramatically favors large corporations over the middle class and small business. As Gary Cohn, President Trump’s Chief Economic Advisor, said, “When you talk to all the CEOs — they’re the most excited about this.”

Why Is That?

Continue reading →

Hermann says please like and share!
0Shares

What Is Older Than Taxes?

Taxes are due

Federal taxes are due for those of us who filed extensions. And I got my first two property tax bills today. Yay!

For those of us who filed extensions this year, our personal income tax returns are due on the 16th of this month. Finding last-minute documentation for my CPA got me thinking about taxes.

And at the risk of sounding hypocritical—I may have…occasionally…griped about taxes—let me take a few minutes to talk about what taxes are. Taxes are the means we band together—yes, that banding is enforced—to buy things we can’t buy individually. I know I don’t want the military beholden to an individual, family, or company. There’s a reason most of us are more wary of mercenaries than soldiers. The word “mercenary” used as an adjective even has a negative meaning in business-speak.

So what are some of the other things we pay for with our taxes? Continue reading →

Hermann says please like and share!
9Shares

Rental Portfolio Progress

One of our goals is to provide quality rental housing at an reasonable price. To meet that goal, we look for potential rentals with an ARV somewhere around three times the median income for the neighborhood.

—with Lee Bruns

We think it’s important to have a diversified real estate investment strategy, so we have rental properties in addition to the houses we buy for rehabbing and resale. Carol and Russell have their own portfolio of rental properties, and Lee and I also have some. This is in addition to the rental properties we are building up for Hermit Haus Redevelopment.

We spend a lot of time working together and providing feedback on our rental properties. As I’ve mentioned before, many of them have had air conditioning issues this summer, and there have been other issues causing team members or specialists we hire to run around the state keeping the properties up. Russell enjoys using his handyman skills and does a lot of the repairs himself.

On happy bit of news came this week when we found new tenants to move into Villa Park 1, a big family to fill the house, which is great.  It’s a nice house, and we’re glad to have folks in there. Now we just need a renter for the rear unit, where Anita and I lived. Continue reading →

Hermann says please like and share!
0Shares

A Question of Documentation

Quarterly taxes are due on June 16th.

It may be a little ironic that I wrote this post on the day second quarterly tax payments are due. Do you think that might have colored the advice I gave my friends?

With all the talk of border security these days, there’s been a lot of talk about hiring undocumented workers. I’m not going to get into the moral considerations or whether or not undocumented workers “take jobs away” from legal residents—citizens or not. I’m not going into all that because by “undocumented” I mean anyone who can’t or won’t complete a W9, the form by which you would file a 1099 at the end of the year. Instead, I’m referring to what we used to call the “underground economy”—cash workers. What I will do is give you a simple formula to make your own decision.

Continue reading →

Hermann says please like and share!
6Shares

Property Taxes Gone CRAZY

Here’s part of a post I wrote for our HermitsBuyHouses blog. It’s been popular over there, so I thought I would share it here and then go into more detail:

Here in Texas, and maybe where you are, too, we just got our yearly property tax bills. We’re used to them going up. In fact, the appraised value of the house we just moved out of, in Williamson County, Texas, went up by $30K! That’s quite an increase, you may be thinking.

But wait, there’s more! We bought a house last year in Milam County, Texas. It’s true; we did make improvements to the house. We painted the exterior, put down new laminate flooring, fixed some broken windows, and trimmed a tree. Sure, that probably increased the value of the house. However, it went from a $39K appraisal to $190K! I guarantee you no one in this town would pay that much for a house with ancient kitchen and bathroom on the main drag, no matter how nice the paint is! Yes, we are going to protest that! Of course, we want to pay for schools and such, so we are happy to pay, just not more than the house is worth.

What if we were on a fixed income and our house’s taxable value went up like that? As I mentioned before, it has been known to happen. If you live around Austin, it may even be happening to you or a loved one.

This almost looks like a joke. it isn’t.

Continue reading →

Hermann says please like and share!
11Shares