Last Minute Thanksgiving Tips

Hopefully you have today off from work and all your shopping is done.

If not, don’t panic.

Tip number one is to reset expectations. If you’re having family over, remember that they’re family and they really don’t care how the house looks. They’re there to see you. So just make sure that you have space to hang up coats, ensure that the bathroom they’re to use is clean, and vacuum the areas where your guests will be hanging out. Place clutter in a box or in shopping bags and move them to a spare room.

Tip number two is make sure your turkey is fully thawed. If it’s not, that’s ok. You can thaw it out this evening, and then keep it in the refrigerator until you’re ready to roast, barbecue, or deep fry the bird.

USA Today suggests that you could even cook a turkey from the frozen state, and that it might turn out better because the frozen water in the breast slows the cooking, thus having the legs and breast meat done at the same time.

Just make sure you get the neck and bag of giblets out of the center cavity before you place it in the 325F oven.

Tip number three is to look for shortcuts. AllRecipes recommends some store-bought short-cuts for Thanksgiving:

1. Pies: hit the local bakery or grocery store for some pumpkin, apple, or berry pies. Add homemade touches by serving with real whipped cream and a cup of freshly brewed coffee.
2. Dinner rolls: whether they are frozen or fresh from a bakery, you can still get that “right from the oven” effect by wrapping them in foil and warming them at 350 degrees F for 10-15 minutes, while you’re baking the stuffing.
3. Easy appetizers: put out some fresh veggies, chips, or crackers with a delicious dip.

If you still haven’t shopped, try to get out this evening. The stores will tend to be packed until around 7pm. And tip number four is to have a list. Start now and then add to it as the day goes by. That way, you won’t have to run to the market tomorrow morning.

Tip number five is to find out if your store is open in the morning just in case you forgot something.

Tip number six is to consider using paper plates and plastic silverware to make cleaning up easier. If you do, purchase them today, and then set the table tonight if you can. It will be one less thing you have to do tomorrow.

Tip number seven is to make the stuffing or dressing today so it’s cooled down for when you stuff the bird, if you choose to stuff the bird. The turkey will cook faster if it’s not stuffed, but there are those people who love the stuffing with all the bird flavor baked into it.

Tip number eight is to prepare the potatoes today. If you do peel and cut up the potatoes, place them in a container with water. Then rinse them off right before you cook them. Your kitchen will stay cleaner if you don’t have peels all over the place.

Are you having a lot of people over to your place for Thanksgiving?

What If You Don't Own Your House for 2 Years?

If you owned and lived in your home for at least two years before it is sold, the law — today at least — is clear: you can exclude from profit up to $250,000 if you are single or $500,000 if you are married and file a joint return.

But what if you have made a profit on your house, but sell it before the magic two years spelled out in the tax law?

In l997, when Congress enacted this favorable legislation, it had absolutely no inkling that the real estate market in the early 2000’s would be so hot, and that so many homeowners would make such large profits on their home sales — even if they did not own their property for the full two years. However, Congress did provide reduced exclusions if prior to holding the property for the full two years, the homeowner had to sell due to a change in employment, health reasons or “unforseen circumstances”.

The IRS has established certain “safe harbors”. If the taxpayer falls within one of these safety zones, they will automatically be entitled to the appropriate exclusion of gain.

Here are some of the “safe harbors”:

Employment: If your new place of employment is at least 50 miles father from the residence sold than was the former place of employment, the homeowner who sells his/her home in order to be closer to the job can take a proportionate exclusion of gain. For example, if the homeowner owned the home for only one year, that homeowner would be entitled to exclude half of either the $250,000 or the $500,000 exclusion, depending on the marital and tax filing status of the taxpayer. According to the regulations, employment is defined as “the commencement of employment with a new employer, the continuation of employment with the same employer, or the commencement or continuation of self-employment.”

Health: if a doctor recommends a change of residence for reasons of health, this will be a safe harbor. What determines “health”? According to the IRS, “if the taxpayer’s primary reason for the sale is (l) to obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury… or (2) to obtain or provide medical or personal care for a qualified individual suffering from a disease, illness or injury.” It should be noted that “qualified individuals” includes family members who are in need of medical assistance away from the principal residence.

The IRS made it clear, however, that a sale of the family home merely because it is beneficial to the general health or well-being of the taxpayer will not fall within the safe harbor.

Unforseen Circumstances: Congress passed the buck to the IRS to come up with definitions — safe harbors — under this amorphous category. The IRS rose to the challenge, by providing that the following events would be considered “safe harbors”, on the condition that these events involve the taxpayer, his/her spouse, co-owner or a member of the taxpayer’s household:

1. death;
2. being terminated from employment and thus eligible for unemployment compensation;
3. a change in job status that results in the taxpayer being unable to pay the mortgage and reasonable basic living expenses for the taxpayer’s household;
4. divorce or legal separation;
5. multiple births resulting from the same pregnancy;
6. Involuntary conversion of the property — such as a condemnation by a governmental authority, and
7. destruction of the property because of a man-made disaster, an act or war or terrorism.

Additionally, the IRS kept the safe harbor door open by allowing the IRS Commissioner the right to expand these seven items should the need arise – either generally or in response to a particular situation involving a specific taxpayer.

Taxpayers who believe that they are entitled to claim an exemption because they fall into one of these safe harbors should immediately consult their tax advisors — and preferably before you sell.

Determining the safe harbor is the easy part; calculating the applicable exclusion may require a graduate degree in mathematics. According to the IRS, “to figure the portion of the gain allocated to the period of non-qualified use, multiply the gain by the following fraction:

Total nonqualified use during the period of ownership (after 2008 for 2013 tax returns) / Total period of ownership

For more information, check out IRS Publication 523, “Selling Your Home”, available free from irs.gov/publications.

Written by Benny L. Kass

Market Commentary for the Week of Thanksgiving

This holiday-shortened week brings us the release of six relevant economic reports for the markets to digest in addition to a couple of Treasury auctions that have the potential to affect rates. All of the week’s data is being posted over only two days, partly due to the Thanksgiving holiday, so the middle part of the week should be the most interesting for mortgage shoppers.

The week’s data starts early tomorrow morning when the first revision to the 3rd Quarter Gross Domestic Product (GDP) is posted at 8:30 AM ET. It is expected to show a small downward revision from last month’s preliminary reading of a 3.5% annual rate of growth. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the benchmark measurement of economic growth. Current forecasts call for a reading of approximately 3.3%, meaning that there was a little less economic activity during the third quarter than previously thought. This would be good news for the bond market and mortgage rates because strengthening economic growth hurts bond prices and mortgage rates.

November’s Consumer Confidence Index (CCI) will be released late tomorrow morning by the Conference Board, giving us a measurement of consumer willingness to spend. If a consumer’s confidence in their own financial and employment situation is strong, analysts believe that they are more apt to make larger purchases, fueling economic growth. This is important because consumer spending makes up over two-thirds of the U.S. economy and makes long-term securities such as mortgage-related bonds less attractive to investors. Analysts are expecting to see an increase in confidence from last month’s level, meaning surveyed consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 96.0 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher Tuesday.

Wednesday has the remaining four economic reports that we need to be concerned with. The first is October’s Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items or products that are expected to last three or more years, such as airplanes, appliances and electronics. This data is known to be quite volatile from month-to-month, so sizable swings from the previous month are fairly normal. It is expected to show a 0.6% decline in new orders. A larger than expected drop would be considered good news for the bond market and mortgage rates as it would indicate manufacturing sector weakness. However, we need to see a sizable variance from forecasts for the markets to have a noticeable reaction due to the usual volatility in the data.

October’s Personal Income and Outlays data is the second report of the day. This data measures consumers’ ability to spend and their current spending habits and is important because consumer spending is such a large part of the U.S. economy. It is expected to show that income rose 0.4% and that spending increased 0.3%. Weaker than expected readings would mean consumers had less money to spend and were spending less than thought. That would be favorable news for bonds and could lead to improvements in mortgage rates Wednesday morning.

The revised November reading to the University of Michigan’s Index of Consumer Sentiment will be posted just before 10:00 AM ET Wednesday morning. As with Tuesday’s CCI, it will give us a measurement of consumer willingness to spend. Analysts are expecting to see an upward revision to the preliminary reading of 89.4. kUnless we see a significant variance from the forecasted 89.9, I don’t think this data will cause much movement in mortgage rates Wednesday.

October’s New Home Sales report will close out the week’s economic calendar. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see little change between September and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates, partly because this report tracks such a small portion of all home sales.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury Notes Tuesday and 7-year Notes on Wednesday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. However, strong investor demand usually make bonds more attractive to investors and brings more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but the stock and bond markets will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

Overall, I am expecting Wednesday to be the busiest day for the bond market and mortgage rates with four of the week’s reports scheduled, but Tuesday is likely to be pretty active also with the most important release scheduled (Durable Goods). There is nothing of importance scheduled for Monday, but Friday will likely be the calmest day of the week as many traders will be home for the long weekend rather than in the office working.

Planning for Black Friday Sales

Did you go out to shop on Black Friday last year? Or did you stay home and take advantage of the online sales from Thursday through Cyber Monday?

And, did you stick to your budget?

Financial advisers recommend reviewing past performance regularly in order to ensure that you are going to stay on track. So if last year, you budgeted $1000 and spent $1500, but then you spent $750 less the rest of the month, perhaps you should update the budget to $1300 or $1400 for your Black Friday/Cyber Monday and then look at reducing the other areas where you spent less last year.

If you know that you’re hosting the big Christmas Day party and you’ll be spending more on food, liquor, decoration and napkins, then figure out your budget for that, and look at reducing spending for gifts. (You really don’t want to sit in your house with the heat off and the lights out to try to save on your electricity to make up for overspending.)

Once you have your budget, it’s time to do your research. There are many sites (see Resources) that leak black Friday ads early. You can figure out what you want to buy, and who has the best price.

Additionally, look carefully at the fine print. You may be able to purchase the item online instead of having to go onsite. And also look to see if there are limited quantities. If not, you may be able to get a rain-check.

Map your strategy out carefully. Also, compare that to your values. You may be able to get a $97 television if you shop on Thursday, but you’re giving up spending Thanksgiving with your family.

The National Retail Federation offers these tips:

• Read store ads carefully. Is the store offering sale items at a limited quantity? Can you get a rain check if it’s an out-of-stock sale item?
• Use the Internet to compare prices, not just the Black Friday ads but also retailers’ regular websites.
• Take the ad with you when you go shopping to make sure you find the precise item at the price advertised. It’s often a good idea to go to the store now to see if the items you want have the quality and features you desire.
• Check to see if your favorite retailer offers an option to buy online and pick up in store. That will allow you to skip the frenzy and head to the customer service counter.
• Focus on bottom-line prices, not discounts. Discount claims may not reflect real savings if the seller inflated the original price of an item.
• Know retailers’ return and exchange policies. Some have a specified number of days in which to return items. Others will give the recipient credit for their after-holiday clearance price without a gift receipt, and some won’t let you return an item bought online to a physical store.

Resources

• Black Friday Ads
• BlackFriday.com
• Brad’s Black Friday
• dealnews.com
• TheBlackFriday.com

Spend time looking online this weekend. Last year, there were some better bargains on the Sunday before Black Friday.

Turkey Fryer Safety

Have you started brining your turkey yet (if you brine)?

Everyone has their perfect turkey recipe. Some brine, some don’t. Some roast and some barbecue on their grill.

And then there are the brave souls who fry their turkeys. If you’ve ever eaten fried turkey, you understand why. The turkey cooks evenly, and the breast meat is done at the same time as the legs and thighs.

For a fun four minutes, watch this segment from the tv show Good Eats about turkey fryer safety on YouTube.

And State Farm provides these 15 Turkey Fryer Safety Tips:

1. Keep outdoor fryers off decks, out of garages and a safe distance away from trees and other structures.
2. Make sure the turkey is thawed and dry before cooking. Ice or water that mixes into the hot oil can cause flare-ups.
3. Watch the weather. Never operate a fryer outdoors in the rain or snow.
4. Place the fryer on a level surface, and avoid moving it once it’s in use.
5. Leave 2 feet between the tank and the burner when using a propane-powered fryer.
6. Follow the manufacturer’s instructions to avoid overfilling. Oil can ignite when it makes contact with the burner.
7. Choose a smaller turkey for frying. A bird that’s 8 to 10 pounds is best; pass on turkeys over 12 pounds.
8. Never leave fryers unattended.
9. Purchase a fryer with temperature controls, and watch the oil temperature carefully. Cooking oil that is heated beyond its smoke point can catch fire. If you notice the oil is smoking, turn the fryer off.
10. Turn off the burner before lowering the turkey into the oil. Once the turkey is submerged, turn the burner on.
11. Wear goggles to shield your eyes, use oven mitts to protect your hands and arms and keep a grease-rated fire extinguisher close by.
12. Skip the stuffing when frying turkey, and avoid water-based marinades.
13. Keep children and pets away from the fryer at all times.
14. Once finished, carefully remove the pot from the burner, place it on a level surface and cover to let the oil cool overnight before disposing.
15. Opt for an oil-less fryer. This uses infrared heat, rather than oil, to cook the turkey

And the Underwriters Lab has a 2 minute video on turkey fryer safety tips as well as a list of potential hazards you should be aware of and tips on how to stay safer.

The two most important tips are to never leave the fryer unattended while it’s on, and never let children or pets near the fryer even if it is not in use. The oil inside the cooking pot can remain dangerously hot hours after use.

How will you be preparing your turkey this year?

Surviving the Thankgiving Holidays

Surviving the Holidays

You’ve already started planning for Black Friday sales. Hopefully you’ve started planning for Thanksgiving.

If not, then we’ll help you get on track in today’s post whether you’re a guest locally, whether you have to travel to the destination (and we mean a long journey, not across town), or if you’re hosting the big supper.

If You’re Hosting

Step one is to make sure you’ve gotten all your invitations out. Does your great Aunt Thelma know that she’s invited? If not, she may start making other plans.

Once you have your final count, plan on a few extra mouths since you never know who will show up. This is one gathering where you want extra food to send home leftovers.

Step two is to plan the meal. The big question is always how big of a bird do I need to buy (unless you’re going vegetarian. In which case, here’s a great site for planning a vegetarian Thanksgiving meal). The answer is about a pound per person. Also, if you need a really big turkey, consider buying two smaller ones as it’s easier to roast and ensure the quality. Plus, a smaller turkey tends to be more tender.

For more on sides, drinks and appetizers, here’s a great site at Dummies.com that details amounts to plan and prepare. Also, if you’re hosting, don’t be shy about asking people to bring things. It cuts down on the amount of work you have to do, and allows new dishes to be introduced.

Step three is to start preparing. If you will be using a frozen turkey, it will need at least a week in your fridge to thaw. Also, you can start buying a few items each time you go to the store such as the bags of stuffing one day, butter and spices the next. Set aside a special place for your Thanksgiving items so they don’t accidentally get used.

Then, start cleaning. If you start small and spend 15-20 minutes a day every day decluttering, decobwebbing, and de-dusting, it won’t feel like such a stressful burden. Also, call now and set up a housecleaning appointment for that Monday or Tuesday. You will have everything picked up by then, and a professional can come in and do a professional cleaning. There are places out there where you can schedule by blocks of time rather than a standard cleaning service.

Step four starts the day before. If you’re going to make a pie, make them now. Set the table. Put out flowers or whatever decorations you want. Plan your day. For example, if you know your turkey needs to be in the oven by noon, plan to start making the stuffing at 11 so it has time to cool down, and you have time to preheat the oven, wash, dry, butter up and stuff (if you do stuff) your turkey.

Step five is the day of Thanksgiving. Follow your plan and make sure you take time out to relax. And once you have the turkey out of the oven, you’ll have time to toss in the wine, beer, soda and juice to chill.

If You’re Traveling

If you’re taking a long trip, remember that this is the busiest time of the year to travel, so expect a lot of delays. Check the weather reports and flight reports at ifly.com frequently. Get to the airport early.

And to reduce your stress, start packing the week before so you don’t forget anything.

Also consider mailing items like clothes to your destination so you only have to worry about a carry-on if you’re flying.

If you’re driving, take time to map out your journey and plan for regular stops to stretch your legs (about every hour if you have kids).

If possible, try to arrive at least a day beforehand so you can rest up from traveling and be your best on Thanksgiving.

If You’re Visiting

Always offer to bring something. If the host and hostess insist you can’t, bring a bottle of something or flowers. Also consider bringing items that they could use later like a box of cookies or chocolates. If you do bring wine or scotch or brandy, don’t expect it to be served. They may or they may have already planned their beverages. However, if you bring a non-alcoholic beverage because it’s what you intend to drink, you should be able to find some space in the fridge.

Offer to arrive early to help finish cooking or setting up.

And always help clear the dishes and offer to wash or dry.

But otherwise, your main job is to have fun.

If You’re Not Planning Anything

It’s happened to everyone where family is out of town, etc. So, first find out if any of your friends have plans. If not, then put together a group and hit a buffet on the town. There are some wonderful places to dig in. Look for hotels to have extravagant spreads.

And you may not know it, but it’s a great time to go out to the movies because they aren’t crowded.

Finally, it’s not too late to plan a quick trip to somewhere warm for a long weekend.

Don’t be stressed if it looks like you don’t have anything to do. Figure out what you enjoy, and then make it happen.

So, which will you be doing this Thanksgiving?

5 Ways Bargain Hunting for Homes Can Backfire

It’s natural to want to save money when you’re making a purchase as large as a home. You want to buy the best home in the best neighborhood at the best price, and to do that, you may think you have to shop in the bargain bin.

FSBOs (for sale by owner,) foreclosures, and short sales aren’t as plentiful as equity listed homes — homes listed with a real estate agent by the seller. You may even scour the MLS (multiple listing service) for signs of desperate sellers, such as homes priced AS-IS, or homes that have been on the market for months.

While some people are successful buying a bargain basement home, you may not be so fortunate, if you put price first. Here are five ways a low price can backfire on you:

The home doesn’t suit your needs. A home is a good buy only if it suits your family’s needs for space, features, comfort, and function. If you buy a home without enough bedrooms or baths, it’s not as comfortable or functional.

A bad fit costs you later. To get out of a home that’s too small, too old, or too far from where you need to be, you’ll likely to pay more in transaction costs to sell the home and buy another than if you’d chosen more wisely in the first place.

Bargains are rare. If a home is priced lower than others in the area, there’s a reason. Sometimes bank-owned home will appear to be a bargain compared to other similar nearby homes, but you may notice a real difference in the way it’s been maintained. It’s not much of a bargain if you find out that all the appliances have been stolen or all the copper wiring has been pulled out of the walls.

The home needs updating. A home priced below market value usually requires expensive repairs or updates. Are you willing to perform the work or pay someone else to do the work? Any remodeling you do will be at today’s prices. Before you buy, get a home inspection and then talk to professionals who can help you bring the home up to today’s standards.

You lose ground trying to lowball the seller. Just as you want the home you buy to appreciate in value, sellers purchased their homes as investments, too. They want to net as much as possible, because they’ve already taken on the risks of buying and maintaining a home. That makes sellers less willing to negotiate on homes that are well priced and well maintained.

If a home has been on the market for a long time without a price reduction, there’s usually a good reason. You have an unmotivated, unrealistic, or upside-down seller, any of which could waste your time unmercifully.

An unmotivated or unrealistic seller simply won’t negotiate to your level. For example, for-sale-by-owner homes are typically priced the same as listed homes, even though the sellers aren’t paying real estate agent commissions, including for your agent, if you have one. Why would you pay the seller not to represent your interests?

Furthermore, a bank foreclosure or bank-approved short sale could take months to close. What if interest rates go up before you close? You may get the home at a bargain price, but the savings could evaporate in higher interest payments.

Right now, home prices are still below previous market highs. Mortgage interest rates are hovering near historic lows. And inventory levels are improving in most areas.

Under these circumstances, you’re buying a home at a bargain already. The best strategy for today is not to try to beat the seller down, but to offer a fair price for the home you think is best for your household.

Written by Blanche Evans