Smart Tax Moves For Your 2010 Taxes

Tax season is right around the corner. Keep more money in your pocket this year by making some smart tax moves!

   Anything you can do to pay less in taxes is a good thing - as long as it's legal ! I've been collecting ideas and good pieces of advice for awhile now in preparation for tax day. Here are some of the best tips I've seen to keep more money in your wallet this year!

Claim Your Home owner's Tax Deduction: 61% of homeowners who were eligible to take the deductions and would have saved on their income taxes took the standard deduction (and paid a higher tax bill) instead.

That's right! Those folks said "No thanks" when Uncle Sam tried to give them back some of their own money - on a silver platter!

A Few Minutes Could Save Hundreds

Lots of taxpayers take the easy way and choose to take the standard deduction on their federal income taxes, which the IRS has set at $11,400 this year for married couples filing jointly. That's fine if your individual deductions don't exceed that amount. If you have a mortgage, though, it's worth checking to see if your home owner's tax breaks exceed or at least put you within reach of the standard deduction. If they do, then you can add on tax breaks for other expenses such as charitable donations and local sales or income tax that are only available if you itemize.

Make money on charitable contributions: Internal Revenue Code Section 280(A)(g) -- for those who want to look it up -- says you can rent out your house for up to 14 days in a calendar year and all the income comes to you tax-free. Go beyond the 14 days, and everything becomes taxable.

Now this is what you do: Rent out your house to a qualified charity or church for a meeting once a month. Call a local hotel and get their rates for a conference room to establish a fair rental amount. Say that's $5,000 for the monthly use over the year. Since we have only 12 months, this monthly use will add up to less than 14 days out of the year, so all the rental income is tax-free.

In appreciation for all the good works the charity or church does, you make a deductible contribution of $6,000. You're in the 25% bracket, so that saves you $1,500 in federal taxes.

What's the result? The charity spent $5,000 and got $6,000. It's up $1,000. You contributed $6,000 and got $5,000 in tax-free cash, plus another $1,500 in tax savings. You're up $500.

Take a remodeling credit: For 2009 and 2010, Congress created an amazing tax credit of 30% of the cost of qualified energy efficiency improvements such as water heaters, furnaces, insulation, roofing, exterior windows and doors, and other items, limited to $1,500. Up to $5,000 in qualified improvements could cost as little as $3,500 after tax.

Of course there are plenty more things to consider when trying to pay as little as possible on last year's taxes, but these 3 seemed to be a pretty good place to start. Don't forget to get your 2010 IRA contribution in before it's too late. You don't want to miss out on the tax break of saving for your future!

Even professional wrestlers know you should have the right insurance coverage!

     Ask WWF superstar Hulk Hogan how he feels about adequate insurance coverage, and he'll LAY IT ON YA, BROTHER (said in my best Hulkster voice)! Hulk Hogan sued his insurance company earlier this year claiming it was their fault he did not have the proper insurance coverage. I want to make sure the same thing doesn't happen with any of my clients! Here's the story as reported by tbo.com:

"CLEARWATER - Professional wrestler Hulk Hogan claimed in a lawsuit filed today that his insurance company failed to upgrade his coverage when his exposure to risk grew, leaving him inadequately insured when his teenage son Nick Bollea got into a wreck that left a passenger grievously injured.


As a result, Hogan, whose real name is Terry Bollea, had to use some of his own money to settle out-of-court a lawsuit filed by the estate of the passenger, John Graziano, because Hogan's insurance was inadequate, the seven-page lawsuit says.

The suit was filed against Wells Fargo Southeast, which has been subsumed by Wells Fargo USA. The company has provided Hogan insurance for nearly 10 years, with coverage for his homes, boats, watercraft and motor vehicles.

The company has collected tens of thousands of dollars in premiums from Hogan and routinely promised to minimize the celebrity's risk, the lawsuit says. Despite Hogan's substantial wealth, however, the company never advised him to increase his insurance or buy an umbrella policy, two avenues the company could have pursued.

One reason to increase Hogan's insurance, Hogan claims, is that his risk grew considerably when his children became teenagers and were able to drive his various cars, the lawsuit says.

"Wells Fargo Southeast had a duty to perform an ongoing insurance evaluation and, at the very least, a yearly or biannual insurance review with Hogan, complete with professional advice and coverage recommendations," the lawsuit says.

"Such a review would have demonstrated that Hogan required an excess/umbrella policy in an amount that appropriately corresponded to his substantial assets and the risk to which they were exposed," the lawsuit says.

"Each time a teenage driver, a vehicle, a watercraft or a piece of real estate was added to Hogan's insurance policies, Hogan's risk increased; however, his insurance coverage remained woefully inadequate, and Wells Fargo Southeast still failed to consult Hogan regarding the advisability of increased coverage and an excess/umbrella policy," the lawsuit says.

Graziano suffered a severe brain injury Aug. 26, 2007, when a car driven by Nick Bollea crashed into a palm tree in Clearwater while Bollea was racing with a friend, authorities have said. Bollea served 166 days in jail after he pleaded no contest to a reckless driving charge.

Graziano's medical bills and continuing care far exceeded the policy limits of $250,000 per person, Hogan's lawsuit says. With no additional insurance, Hogan's fortune then of roughly $30 million was exposed and unprotected, the lawsuit says.

In addition, Hogan had signed for his son's driver's license, which exposed him as an individual to liability, the lawsuit says. Wells Fargo Southeast should have known this, the lawsuit says.

Had Wells Fargo Southeast adequately insured him, Hogan says he would not have had to dip into his personal fortune to settle the lawsuit filed by Graziano's guardian, Hogan's lawsuit says. The amount of that settlement has never been disclosed."

There are a few valuable lessons to be learned from the Hulk's situation. Make sure you sit down with your insurance agent every year or two and discuss what's going on in your life. You might need new coverage, different coverage or less coverage depending on what you've got going on. It's hard for your agent to make recommendations about protection if they have no idea what you're up to.

Secondly, you don't have to be a multi-millionaire to have someone sue you for a million dollars (or more)! In Colorado you are responsible for all of the damages you cause in a car accident. If you do not have enough insurance to pay the bills, the bills do NOT go away. The money just comes out of your pocket instead of the insurance company's.

Talk to your local, professional agent and find out if your insurance coverage is adequate. It will keep your finances from getting body slammed!

Vicci's Story

     Vicci Grey was run down by a drunk driver and abandoned on the side of the road. Now on the road to recovery, Vicci is trying to work through the physical and financial pain that the accident has caused her.

"I was on the way home from my daughter's 37th birthday party and I saw a truck ahead of me in the road that seemed to be out of control. He was on the wrong side of the road. All of a sudden it seemed as though he slammed his foot on the gas and veered straight towards me. I thought that if I could just turn the corner on the next street maybe I could keep him from hitting me. I couldn't get out of the way fast enough, and he broadsided me."

The driver that hit Vicci was driving a Lincoln Navigator. After he crossed the median into Vicci's lane and hit her, the driver and his passenger got out of the truck and ran. Both were heavily intoxicated and wanted to get away before the police arrived. Neither of them checked to see if Vicci was alive, if she was hurt, or if she needed help. She was hurt. She did need help. Both cars were totalled.

"I couldn't get out of my car, I couldn't even try. I wanted to find my cell phone so I could call my kids and let them know I was in an accident but my neck had swollen up and I couldn't turn my head. My arm had gone completely numb and I couldn't really move."

Fortunately for Vicci, someone in a nearby house had heard the accident and called the police. Within 5 minutes they were on scene and the firemen were cutting Vicci out of her car with the jaws of life. Before she really knew what was going on, Vicci was at the hospital. The accident had fractured Vicci's C6 and C7 vertebrae and cause extensive nerve and muscle damage. Vicci spent the next three days in the hospital before being sent home on oxygen for 2 months of bed rest and physical therapy.

The police found the passenger in a Walgreens near the site of the accident that night. After 2 months, the police have still not located the driver. The passenger admitted to police that they had both been drinking and that he had told the driver many times that he should not be driving, but he didn't listen. Although the driver does own a home in Colorado Springs, he had recently lost his job and was not living at home due to a domestic violence case with his wife. Although the driver did have insurance, Vicci was about to find out how little he had and how little it would help.

Vicci has not been able to drive or return to work in the two months since the accident. She has been walking to a nearby physical therapist 3 times a week in an effort to recover and regain her full mobility. About a month and a half after the accident, Vicci was finally able to get to her car and retrieve some of her belongings.

"When I finally saw my car, it was truly devastating", says Vicci. "It was like looking at death, it was absolutely horrible." Vicci soon found out that the driver's insurance policy was not going to be enough to pay for her car because the driver had such low limits. "The insurance that he had should be against the law. He had the barest of bare minimum that would pay $25,000 for my medical bills and work loss and up to $15,000 for my car." Vicci's hospital bills were already over the $25,000. Add in the work loss, physical therapy, oxygen for her home, neurologist visits, etc. and things really start to add up. Vicci's car was also a total loss and cost well over the $15,000 provided by the other driver's insurance policy.

Fortunately for Vicci, her own insurance policy DID have the right coverage to protect her. Her own insurance policy DID pay off her car and WILL take care of her medical bills, physical therapy, work loss and anything else that Vicci needs to get back to normal.

"It was a relief to find out what kind of insurance coverage I had. I had not paid much attention to my own insurance coverage because I had no reason to. I'm a good driver and I've never hit anyone. You always think that it's not going to happen to me, you always think that you're the invincible one so you don't think much about your coverage. You only think about trying to save money here and there. I'm truly thankful for what I have on my policy to take care of me."

After two full months, Vicci was finally cleared to start working again...slowly. She'll have to take it easy for the next few months, taking frequent breaks and limiting her driving but she needs to get back to work and is grateful for her progress so far.

"My insurance policy with American National has pretty much sustained me. It paid off my car and is helping me with a rental car. The service has been phenomenal. Trying to deal with his (the other driver's) insurance has been a nightmare, it's been a full time job."

When asked if she had any words of advice regarding what she's learned from her ordeal, Vicci had this to say: "Make sure that you have good insurance coverage. Even if you think you're just giving your money away  because this sort of thing could never happen to you, you just don't know. You can never know for sure. Having the right insurance has made the difference between being destitute and being okay; between being under a bridge and being here at home. You need to have someone to sit down and talk to and then listen to what they say about protecting yourself. It's not about anyone trying to sell you insurance, It's about you and what you need. If it had not been for Robert and American National I would be devastated. I still have a long way to go, but I thank God for all that's been done for me."

Vicci has been through a lot and learned first-hand the value of having the right insurance to stay protected. She's been a great client for years and I appreciate her sharing her story and wish her a full and speedy recovery.

New Study Reveals Home Owners Know LITTLE About Their Home Insurance

I recently came across a study from Zogby International that asked the question "how much do people know about the insurance for their most valuable asset - their home?" The answer was alarming to say the least. The majority of home owners have some very mistaken ideas about what their home insurance does - and does NOT - cover. Unfortunately, some home owners will find themselves very under insured if they don't take action, while others are obviously over paying for coverage they may not need. Read the full report below:


Homeowners Coverage Knowledge Gap Wide Among Consumers


Many Americans admit to having a knowledge gap when it comes to what their home insurance actually covers, according to a new survey.

Nearly one third (31 percent) of Americans don't know how much their most valuable assets -- their homes -- are insured for, and an additional 46 percent don't know how much coverage they have for their homes' contents, such as furniture and clothing, say the results of a survey by Zogby International for MetLife Auto & Home. Additionally, many homeowners aren't aware of coverage overlaps that may exist, which could result in opportunities to save money.

The first of a two-part "Insurance Literacy" survey, tested consumer knowledge of insurance basics, including homeowners, condo, and renter's insurance.

Common misconceptions that could lead to coverage gaps were:

-- Thirty percent of homeowners believe their insurance coverage is based on the current market value of their home. Actually, the available coverage limit for homeowners insurance is based on the cost to rebuild the home, a mistake that could lead to confusion for homeowners trying to evaluate whether they have the right amount of insurance.

-- More than two thirds (71 percent) of those surveyed believe insurance pays for the full cost to rebuild their property in the event of a major loss, such as a fire or other natural disaster. But nearly all insurance companies "cap" the amount paid to rebuild the dwelling following a total loss, unless additional coverage is purchased. Furthermore, the coverage is subject to a deductible, and certain causes of loss, such as water damage caused by the natural disasters of flooding, are excluded completely.

-- Almost three-quarters (73 percent) believe insurance will pay the full cost to replace personal belongings in the event of a loss. However, depreciation is usually factored in, unless optional replacement coverage is selected, and the coverage, regardless of the chosen settlement method, is subject to a deductible.

-- Sixty percent believe insurance will pay for the full cost of replacing valuables, such as jewelry and collectibles. Most insurance policies contain a payment cap for replacing valuables, although additional coverage can be purchased, and the coverage is subject to a deductible.

-- For a major loss, nearly two-thirds (64 percent) of those surveyed expect their insurance to cover any building code mandated upgrades that are necessary. Without an endorsement/rider, most home insurance does not cover required upgrades located in an undamaged portion of the home.

"More than two-thirds of consumers surveyed also said they'd rather pay a higher premium than be told that a loss isn't covered," said Bill Moore, president of MetLife Auto & Home. "To ensure this doesn't happen, consumers can find the best value by learning more about their policies and selecting the coverage that best meets their needs, rather than simply shopping for the lowest premium."

On a positive note, with purse strings tight, opportunities exist for consumers to become more aware of what their current policies do cover in the event of a loss, to avoid insurance overlaps and unnecessary out-of-pocket expenses. For example:

-- Electronically downloaded and stored entertainment, such as music, ring tones, etc., can be expensive to replace without easy access to free re-downloads. However, more than 90 percent of homeowners didn't know that insurance can extend coverage to electronic data.

-- Almost half (47 percent) didn't realize there's no need to secure additional coverage to insure the personal property of college-age children living on campus. This is covered under the standard homeowners contract, subject to its terms and conditions.

-- Many homeowners would be surprised to learn that damage to appliances and wiring from a power surge would be covered by their insurance policy. More than half (59 percent) didn't think it would -- limiting out-of-pocket expenses to a deductible.

Natural Disasters

Many homeowners exhibit confusion about insurance coverage for natural disasters and unforeseen occurrences. The majority of homeowners understand that flood damage is written on a separate policy from their standard insurance policies. However, many consumers are still misinformed -- or unsure -- about the coverage available for other types of events.

In some cases, homeowners are aware of the potential for a loss, but don't realize what coverage they have against a particular hazard. Among other things:

-- Although 83 percent believe foundation damage from earth movement is very serious or somewhat serious, only 37 percent know they aren't covered for this under the standard homeowners policy.

-- More than a quarter (28 percent) incorrectly believe they'd be covered for an earthquake or volcanic eruption, and the same amount aren't sure one way or the other. Most standard policies exclude this peril.

-- For water damage from a sewer or sump-pump back up, 67 percent of homeowners believe this would be covered. Without the appropriate rider, most policies don't cover this.

The Zogby/MetLife Auto & Home homeowners insurance survey sample consisted of interviews with 1,196 adults who have homeowners, condo, or renter's insurance, and who are living in a household with a telephone. The interviewing was conducted May 26, to June 9, 2010.

Source: MetLife Inc.

Insurance Implications on Buying a New Home

Home Buyers Insurance Checklist

Shopping for your dream house? There are many considerations when looking at real estate, such as property taxes, school district, available recreational opportunities in the neighborhood, to name a few. But an important and often overlooked consideration is the insurance implications of your purchase. You will be paying insurance on your home for as long as you own it, so you should factor the cost of insurance into the home-buying process. You don’t want to find out that your dream home is more expensive to insure than you thought—after you own it!

 Before You Start Looking for a Home

Thinking through all the costs associated with buying a home will make the process run more smoothly, and it may also save you money. It is important to:

Check Your Credit Rating

A good credit history helps you in many ways. Good credit makes it easier to get a mortgage at a competitive rate, and it may also qualify you for a good credit discount on your insurance. Make sure you know your credit rating before you apply for a mortgage. Get a copy of one or all of your credit reports. Make sure they are accurate and report any mistakes immediately. If your credit is not as good as it could be take steps now to improve it. The I.I.I. has information on credit and insurance to help you with this process

Protect Yourself with a Renters Insurance Policy

If you are currently renting a house or apartment, protect yourself financially with a renters insurance policy. This provides insurance protection in the event a fire, hurricane or other insured disaster damages or destroys your personal possessions. It also covers the cost of additional living expenses if something happens to make your rental home or apartment unlivable. Additionally, renters insurance gives you liability protection if someone is injured in your home and decides to sue you. Disasters happen, and it would be unfortunate to have to use the down payment you saved to buy your new home to pay for losses that could have been covered by renters insurance. Furthermore, having a renters insurance policy provides a useful insurance
history to your prospective homeowners insurer when you go to buy your first home.

While House Hunting

As you search for your new home, remember that the physical characteristics of the house—its size, location, construction and overall condition—can affect the cost, choice and availability of home insurance. Following are some factors to consider when shopping for a home:

Quality and Location of the Fire Department

Houses that are located near highly-rated, permanently staffed fire departments usually cost less to insure. This also holds true for homes that have a hydrant nearby. An important underwriting criterion for insurance companies is a community’s investment in fire protection, which includes trained firefighters, proper equipment and adequate supplies of water.

Proximity to the Coastline
Houses located on or near the coast will generally cost more to insure than those further inland. There will also likely be a hurricane or windstorm deductible. This is a percentage deductible based on the cost to rebuilding a home, rather than a flat dollar amount. With a homeowners policy that has a $500 standard deductible, for example, the policyholder pays the first $500 of the claim before insurance kicks in. However, as percentage deductibles are based on the home’s insured value, if a house is insured for $100,000 and has a 2 percent deductible, the first $2,000 of a claim is paid out of the policyholder’s pocket.

There are two kinds of wind damage deductibles: hurricane deductibles, which apply to damage solely from hurricanes; and windstorm or wind/hail deductibles, which apply to any kind of wind damage. Percentage deductibles typically vary by state and range from 1 percent to 5 percent of a home’s insured value. These come into effect if certain triggers occur—a deductible triggering event can be, for instance, an official National Weather Service declaration that a storm is generating hurricane-strength winds (i.e., 74 miles per hour, or more) in your community.

In coastal areas with high wind risk, some homeowners may select higher hurricane deductibles to lower their insurance premiums, but that means they pay more if their home is damaged. In some coastal communities, private homeowners insurance coverage may not be readily available. Instead, you may need to purchase insurance through a state-run insurance program, which can provide less coverage, and in some cases be more costly, than private insurance.

Age of the Home

A stately, older home can be quite beautiful, but ornate features such as plaster walls, ceiling molding and wooden floors may be costly to replace and raise the cost of insurance. Plumbing and electrical systems can become unsafe with age and lack of maintenance. So, older homes may cost more to insure. If you are considering buying an older home find out how much it will cost to update these features and factor it into the cost of ownership.

Condition of the Roof

Ask about the condition of the roof. A new roof matters to insurers and keeps you and your family safer. Depending on the type of roof and whether or not you use fire and/or hail resistant materials, you may even qualify for a discount. Talk to your insurer about qualifying discounts.

Is the Home Well-Built and Up to Code?

Find out whether the house has been updated to comply with current building codes. Homes built by careful craftsmen and those built to meet modern engineering-based building codes are likely to better withstand natural disasters. Consider hiring a licensed home inspector who is knowledgeable about the latest building codes to inspect the property before you sign a mortgage.

Risk of Flooding

Damage from flooding is NOT covered by standard home insurance policies. If you are buying a home in an area at risk from flooding, you will need to purchase separate insurance. Insurancefor flooding is available from the federal government’s National Flood Insurance Program (NFIP), which is serviced by private carriers, and from a few specialty insurers. People often underestimate the risk of flooding. Ninety percent of all natural disasters in the U.S. involve flooding, according to the NFIP. More important is that 25 to 30 percent of all paid losses for flooding are for damage in areas not officially designated as special flood hazard areas. If you are not in a high-risk flood zone, NFIP coverage is available at a lower premium.

History of Earthquakes

While earthquakes are most frequently associated with California, they have occurred in 39 states and, like flooding, are not covered under standard home insurance policies. Earthquake insurance is available from private insurers as an endorsement to a homeowners policy, and in California from the California Earthquake Authority, a privately funded, publicly managed organization. The cost of earthquake insurance differs widely by location, insurer and the type of structure being covered. Generally, older buildings cost more to insure than new ones. Wood frame structures may benefit from lower rates than brick buildings because they tend to withstand quake stresses better. Regions are graded on a scale of 1 to 5 for likelihood of quakes, and this
difference is reflected in insurance rates.

Swimming Pool or Other Special Feature

If the house has a swimming pool, hot tub or other special feature, you will likely need more liability insurance. You may also want to consider purchasing an excess or umbrella liability policy to provide added protection in the event someone gets injured on your property and decides tosue you.

Before You Place a Bid on the Home

Check the Loss History Report

Ask the current owner of the house for a copy of the insurance loss history report, such as a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report from ChoicePoint or an A-PLUS report from ISO, a leading source of information about property/casualty insurance. This is a record of insurance claims on the house that can provide answers to two questions that any savvy homebuyer should ask:

Have there been any past problems in the home?

If damage has occurred, was it properly repaired?

Note that prior claims are not a barrier to getting insurance. In fact, sometimes a recent claim can have positive ramifications. If, for example, a roof was damaged by a wind storm and replaced by a new one, this would make the house more desirable to an insurance company. If there have been no claims within five years, there will be no loss history report on the home.

Get the House Inspected

A thorough inspection of the home is very important. The inspector should:

• check the general condition of the home;
• look for water damage, termites and other types of infestation;
• pay special attention to the electrical system, septic tank and water heater;
• show you where potential problems might develop;
• double-check that past problems have been repaired;
• suggest upgrades or replacements that may be needed.

If the inspector raises questions, your insurance company will as well. And, be sure to find out if there is an underground oil storage tank, as many insurers will not provide policies for homes that have one.

Determine How Much It Will Cost to Maintain the House

Routine maintenance is your responsibility as a homeowner. Losses caused by failing to properly care for your home are not covered by standard homeowners insurance policies. The yearly cost of taking care of your house is another factor to be included in the overall price of owning the home.

Call Your Insurance Representative

Don’t wait until the last minute to think about insurance. Ask your insurance professional if the house will qualify for insurance, and get an estimate of the premium. The sooner you act, thesmoother the process will be. Don’t be shy about asking for estimates on more than one house. Insurance is an important consideration when purchasing a home. If you are uncomfortable with the cost of insuring a particular house, keep looking for one that better fits your financial situation. If you do not already have an insurance agent or company representative, get recommendations from family, friends or co-workers, or consult your state insurance department.

Purchasing Insurance for your New Home

When purchasing a home insurance policy, work with your insurance agent or company representative to get enough insurance to rebuild the house in the event of a total loss. No new home buyers want to think that their house could go up in flames, but disasters do happen. It’s important to have enough insurance to completely rebuild your home and replace all of your personal possessions. You also need to make sure you have enough liability insurance to protect your financial assets. Ask about additional coverage such as:

• Replacement cost for personal possessions
• Extended or guaranteed replacement cost for the structure
• Building code upgrades
• Sewer and drain back-up coverage
• Inflation-guard
• Umbrella coverage for a pool or other high-risk items
• Special riders for jewelry, collectibles and expensive items

To save money on your homeowners insurance, shop around and take the highest deductible you can afford. Since most people only file a claim every eight to 10 years, having a higher deductible saves money over time and preserves your insurance for when it’s really needed. You can also ask about available discounts for:

• Multi-policy (home, car or other policies with the same company)
• Smoke detectors
• Fire extinguishers
• Sprinkler systems
• Burglar and fire alarms that alert an outside service
• Deadbolt locks and fire-safe window grates
• Being 55 years old and/or retired
• Long-time policyholder
• Upgrades to plumbing, heating and electrical systems
• Earthquake retrofitting to make the home safer
• Wind-resistant shutters

Additional Resources

• ChoicePoint
• CLUE reports
• Fair Isaac
• To order a credit report, MyFICO.com
• For help in determining your credit score, call 800-777-2066
• Institute for Business & Home Safety
• ISO
• -To order a copy of your A-PLUS report, call 800-709-8842
• -For up-to-date information on fire protection services throughout the country, see the Public Protection Classification program
• National Flood Insurance Program

This article was printed by the Insurance Information Institute. More information about teh Insurance Information Institute can be found by visiting their website at http://www.iii.org/