As we head into the spring buying season it’s important to
remember that many people buy at this time of year not just because the weather
is nicer and they feel like actually being outside for more than 3 minutes at a
time but also because they are getting their income tax refund(s). The IRS reported that last year the average
refund was $2651. And that’s just their
federal refund. When you add in any
state tax refund you have a great recipe for a down payment on a home. This is the time when those refunds are
hitting people’s bank accounts so make sure they know how to turn those refunds
into home ownership…
It isn’t just the actual dollars hitting their bank that
gets people off the fence there is also a real psychological impact that makes
potential buyers feel more secure and ready to make the move into home
ownership. Sometimes we forget how scary
and overwhelming that first home can be.
A nice tax refund can ease those fears and make that transition the
exciting and pleasant experience it should be.
This IRS chart shows some interesting stats from last year:
Filing Season Statistics May 10, 2013
2013 FILING SEASON STATISTICS
|
|||||
Cumulative
statistics comparing 5/11/12 and 5/10/13
|
|||||
Individual Income Tax Returns:
|
2012
|
2013
|
% Change
|
||
Total Receipts
|
135,473,000
|
134,349,000
|
-0.8
|
||
Total Processed
|
130,261,000
|
129,674,000
|
-0.5
|
||
E-filing Receipts:
|
|||||
TOTAL
|
112,089,000
|
113,954,000
|
1.7
|
||
Tax Professionals
|
70,344,000
|
70,380,000
|
0.1
|
||
Self-prepared
|
41,745,000
|
43,574,000
|
4.4
|
||
Web Usage:
|
|||||
Visits to IRS.gov
|
255,269,615
|
318,408,842
|
24.7
|
||
Total Refunds:
|
|||||
Number
|
102,522,000
|
101,082,000
|
-1.4
|
||
Amount
|
$277.180
|
Billion
|
$267.946
|
Billion
|
-3.3
|
Average refund
|
$2,704
|
$2,651
|
-2.0
|
||
Direct Deposit Refunds:
|
|||||
Number
|
79,308,000
|
79,880,000
|
0.7
|
||
Amount
|
$231.656
|
Billion
|
$228.467
|
Billion
|
-1.4
|
Average refund
|
$2,921
|
$2,860
|
-2.1
|
Page Last Reviewed or Updated:
21-May-2013
Interesting to note that folks who use direct deposit are
those w/the larger refunds. Now that
your buyer has a nice tax nest egg in hand you can show them two more important
tax impacts of buying a home:
#1 – Their income taxes are likely to go down, perhaps substantially, when they buy a home thereby increasing the benefit of buying vs. renting. Home buyers enjoy a nice deduction for all that interest they pay on their home loan (among other nice deductions you get when you itemize your deductions on your return). It can mean the difference of $200-$300 per month on an average size home assuming average tax situation.
#2 – You might suggest they talk to their accountant or HR person at work about changing their withholdings on their paychecks to get a higher net paycheck every month. This can put more money in their pocket each month and, thanks to their new tax deductible mortgage, perhaps still keep their annual tax bill (or refund) the same as last year.
#1 – Their income taxes are likely to go down, perhaps substantially, when they buy a home thereby increasing the benefit of buying vs. renting. Home buyers enjoy a nice deduction for all that interest they pay on their home loan (among other nice deductions you get when you itemize your deductions on your return). It can mean the difference of $200-$300 per month on an average size home assuming average tax situation.
#2 – You might suggest they talk to their accountant or HR person at work about changing their withholdings on their paychecks to get a higher net paycheck every month. This can put more money in their pocket each month and, thanks to their new tax deductible mortgage, perhaps still keep their annual tax bill (or refund) the same as last year.
Either way you slice it putting that tax refund towards a
new home is a great investment and one that pays tax dividends for years to
come.
Eric Lundberg - NMLS #261588
Eugene , OR .
Eric Lundberg - NMLS #261588
President, Chinook Mortgage Ltd - NMLS #261588
541.302.3210
www.ChinookMtg.com