First-Time Homeowner Tax Guide (2022)

You did it! You secured a new home in the hottest seller’s market we’ve ever seen. Now what? Tax season is here and you’re wondering how this new purchase will change how you file. We’re here to help. Here are a few things to keep in mind as you head into your first tax season as a homeowner. Note, this article has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Understand standard vs. itemized deductions.

Being a homeowner has tax perks! However, you might not see them right away. When filing taxes, there is a threshold for deductions which changes depending on your situation. Unless your deductions exceed this threshold, you will be receiving the standard deduction, which means you won’t have the opportunity to deduct many of the write-offs homeowners can enjoy, at least not yet. Unless your deductions exceed $12,550 (single) or $25,510 (married/joint), you will be getting the standard deduction. But that’s not a bad thing! Receiving the standard deduction makes it easier to file your taxes since you won’t need to itemize your deductions and it takes some of the pressure off you to have proof of expenses - which, as a new homeowner, may be just what you need. You’re more likely to deal with itemized deductions your second year of homeownership (or beyond) than you are your first, so if you aren’t experiencing tax benefits now, this information is still pertinent to you.

What qualifies as a write-off?

To know if your deductions exceed the threshold mentioned above, you’ll need to know what counts as a write-off. Let’s look at what will and will not increase that number as seen on the Schedule A form:

Medical and Dental Expenses

Deductions for medical and dental are more common with age. Many first-time homeowners will not incur enough medical expenses to earn deductions from this category. To get a deduction from medical and dental expenses, your total medical and dental expenses for the year must exceed 7.5 percent of your adjusted gross income (AGI). If your expenses do exceed that amount, you may deduct anything over 7.5 percent. (e.g. If 7.5 percent of your AGI is $5,000 and you incurred $8,000 in medical and dental expenses, $3,000 will count towards your deductions).

Taxes (including property taxes)

As a homeowner, you are now paying property taxes, which qualify as a tax write-off, as do your other State and Local Taxes (S.A.L.T.). One change to be aware of is that in 2017, former President Trump placed a $10,000 limit on the S.A.L.T. deductions. This means you can no longer deduct more than $10,000 in this category of your write-offs.

Interest (including mortgage interest, points and insurance premiums)

This is one category where homeowners will see many of their deductions. Interest paid includes, of course, mortgage interest… but it also includes any mortgage points you purchased and any mortgage insurance premiums you paid. We’ve mentioned how you’re more likely to itemize your deductions in the later years of homeownership but take note of this exception. Mortgage insurance is required when you have less than 20 percent equity in your home (which is likely for your first several years of homeownership). Once 20 percent equity accumulates, many homeowners opt to cancel their mortgage insurance, which will eliminate that tax deduction.

Gifts to Charity

Gifts to charity is another category to itemize deductions. This is a fairly straightforward deduction; however, there is something worth noting for 2022. The Coronavirus Aid, Relief and Economic Security (CARES) Act could impact what you are able to deduct, even if you expect to take a standard deduction. For example, an unmarried individual could deduct up to $300 donations to qualifying charities even if they are taking a standard deduction. That number is double for joint-filers.

Casualty and Theft Losses

We hope you did not suffer any loss during your very first year of homeownership, but if you did, this deduction can help in your recovery. This section includes losses from a federally declared disaster - so losses from the Marshall and Middle Fork Fires would qualify. Theft losses would require proof that the property was, in fact, stolen and not just lost. With any luck, you won’t have to worry about this category.

Other (including home office space, some IRA fees and some home improvements)

Various other expenses could qualify you for a deduction. For example, the pandemic created a shift in work culture, and now many people are using space in their home as a home office. While you may no longer deduct unreimbursed work expenses such as office equipment, you may be able to earn a deduction for space in your home that is “regularly and exclusively” used for your employment. Another possible expense that may impact your taxes is if you dipped into your IRA to make a down payment. Usually, this will result in a 10 percent penalty, but not in this case. You could take up to $10,000 without incurring the penalty. Finally, a common question you’re probably asking yourself is: do home improvements count as a write-off? Unfortunately, no, not usually. There are exceptions though, such as if your improvement contributes to the energy efficiency of your home, increases your capital or is being rented out to tenants or your own business.

Conclusion and final comments.

You can see how this can start to add up, especially after your first year when all 12 months of payments contribute to the sum. There are great tax benefits to be had if you qualify for an itemized deduction. It is important to remember, ever if you do not currently qualify for these special homeownership perks, there are many others! Homeownership is one of the best things you can do to build your wealth, with or without those tax deductions.

[Written on behalf of a third party]

Colorado’s First Zero-Energy Neighborhood is Here

It may sound like a news headline from the future, but the future is here. Arvada is now home to the Geos Neighborhood, a community which is fully powered by renewable energy harnessed on-site.

The Home Energy Rating System (HERS) Index gives buildings that produce their own energy a HERS score of zero; these homes may be called “zero-energy” or “net-zero” buildings. Every home in the Geos Neighborhood is not only designed to meet this requirement, but they actually produce more energy than needed, which means they are “energy-plus” homes. A Geos resident might not even need to purchase gas for their car anymore.

Boasting the title of first fully net-zero community in the state is impressive enough, but by the time the 25 acre development is complete, it will also claim the title of largest mixed-use net-zero community in the country. The project’s developers, Cornerstone Homes, attribute their success to a fearlessness to take on ambitious projects that other developers are hesitant to pursue. “It’s not a challenge to build a net-zero home; the challenge is building a net-zero home that is affordable to buyers,” explains Casey Van Iten, Project Manager of Cornerstone Homes. Built using the most advanced practices in sustainable design, it is astonishing that some Geos homes have a price point as low as $390,000.

The secret to building a self-sustaining home is to work with the elements rather than against them. Each home must be custom designed based on the land it occupies. A net-zero design must be clever enough to avoid wasteful pitfalls while utilizing the opportunities surrounding it.

There are several contributing factors to the super-efficient design of the Geos Neighborhood:

Passive Solar

One of the first things the master planner will consider is the position of the home in relation to the sun. Proper consideration to solar exposure can make a home up to 15 - 20 percent more efficient. By optimizing for sun-bathed windows in the winter and shaded windows in the summer, the internal temperature of the house needs less correcting. Proper consideration of sunlight also means these homes are well lit and require less energy to illuminate (LED lighting also contributes to cost savings).

Geothermal Heating and Cooling

Of course, some climate control will still be necessary, but there are ways to maximize efficiency for this, as well. Geothermal climate control involves utilizing ground temperatures to maintain a comfortable atmosphere inside the home. To do this, a well is drilled into the earth where temperatures are 55-65 degrees year round. From here, water can be cooled or heated to this temperature and then assist in the adjustment of the home climate. A home using geothermal technology may only need adjustments of about 10 degrees. This technology and all other appliances in the home are Energy Star certified.

High-Performance Shell

With high tech foam insulation and triple panned windows meticulously installed, a Geos house is able to reduce its natural air change per hour to an astonishing 0.04. This means under normal circumstances, only four percent of the air is leaked from the building per hour. For further energy savings, the home uses energy recovery ventilation. Because of the air tightness of the homes, volatile organic compounds are prohibited in the building materials.

Civic Stormwater Management

Although water conservation is not factored into HERS scoring, the developers are passionate about environmental sustainability and factored water use into their designs. In the Geos Neighborhood, stormwater is redirected to irrigate the community’s plant life. The landscape includes street tree rain gardens, community gardens, fruit trees and percolation parks. Trees are also placed thoughtfully to contribute to passive solar design.

Community Stewardship

An integrated community is not only good for the individuals living in this neighborhood, it is also helpful for energy conservation. A close-knit community is helpful for minimizing the usage of motor vehicles. The neighborhood includes a mixed-use main street, which has ground floor shops and office space with residential living above. Geos residents will have access to essential neighborhood services such as health and beauty care, financial and tax consulting, education and art studios. No more driving to yoga!

40 percent of energy in the US is consumed by buildings. Imagine the impact net-zero design could have on our ecological footprint. Plus, by denying the use of fossil fuels, we can help preserve an ecosystem that is hospitable to life. There is a push happening for this kind of efficient living. California has already mandated that all new residential buildings must be zero net energy by 2020. Many developers are worried about the impending regulation, but the Geos Neighborhood is proving that not only can it be done, it can be done quite well. 

[Written on behalf of a third party]

In Favor of the New Flag

Aesthetically, I will admit that I prefer the original flag. Those six bright colors are a beautiful representation of the full spectrum of identity and celebrates the gradating differences we each have.

But what happens when the flag fails us? Or rather what happens when the community fails us? On paper, this is what the flag represents but do we really embrace the meaning? The LGBTQ community is plagued with casual exclusivity and blatant racism - not so much what the rainbow flag stands for. Adding black and brown is a representation of all people of color (POC), despite any confusion you may have. POC too often feel unaccepted and unwanted in the community. The additional colors are a reaction against this epidemic. Accepting these new colors into the flag is a representation of acceptance of POC in our community.

The dark colors alongside the vibrant are criticized as being ugly. Not as ugly as the backlash against them, I assure you. Many POC are feeling representation and acceptance by the inclusion of these colors where they otherwise feel excluded. You, personally, may not want those colors in the flag, but if it brings the community together, does it matter? If we are truly seeking equal distribution of the pie, you might have to sacrifice some of your own slice. In this case, your sacrifice is to include drab colors in your design. Is that so bad?

This tactic is also criticized for NOT being inclusive. It is argued that by bringing these two colors into the flag, it segregates further and redundantly brings race into the mix. After all, isn’t’ race included in the “gradating differences” represented by the spectrum? Isn’t elevating POC to be represented on the flag exclusive? Where is the white bar? Doesn’t that sound a LOT like “Where is the straight flag?”or “All Lives Matter”?

You may not like the look, but you should support it. Don’t just say you accept POC into the community, show it. Accept the colors into the flag and by doing so, show the disheartened queer POC that you recognize and oppose the discrimination against them. #MoreColorMorePride

Anti-Fracking Art

[Originally published June 8, 2017]

Colorado history has been carved by water as much as it has carved our landscape. From our very beginning, water could be argued as being the single most powerful defining factor. Our first explorers used water as their guide to navigate the harsh new landscape; the gold found in our rivers attracted settlers; irrigation transformed our landscape and economy. Our water has been a prominent subject within legislation since the 19th century. The importance of our water extends beyond our own state; Colorado is referred to as The Headwaters State as it is the origin of water for many other states. 

Of course, Colorado is not the only place to have a sacred tie to water. Water is the elixir of all life; water is a God among us; water is the mother of us all. And its in grave danger. 

In recent years, our thirst has extended far beyond water. Our modern lifestyle is demanding for resources. Beyond this, extreme wealth has made the fingers of the invisible hand extremely powerful. The hand is now reaching to extract oil from below us and is crushing any force attempting to stop it. 

Many will argue fracking is safe and controllable. In my new home, Golden, a city with particular prominence in Colorado's water history, is also home to the Colorado School of Mines. The school forges brilliant minds, no doubt, but their brilliance may be clouding their judgment with overconfidence.

The general consensus among them seems to be that they can "theoretically frack perfectly and avoid all dangers"... Surely they must know you can never rely on perfection? Doesn't it seem like engineers are geniuses that somehow lack common sense? (My sister graduated from Mines, I can attest to this first hand.)

The fact of the matter is that fracking poses a huge danger to the safety of our water. If fracking water escapes into our groundwater, it will be poisoned. And even IF the water could be assured to not ever escape (a promise that logically can never be made), the water used is still forever removed from the water cycle. Even if the fracking industry used every ounce of care they had to frack safely, accidents still can happen. But what is worse is that they will NOT use the proper caution (especially on their own). They will cut corners to save time and money which will inevitably lead to disaster. Poisoned water will leach into our bodies through our water and our crops. Our lifeline will be corrupted. 

It is 2017 and fracking is a hot subject of debate. Once again, the country's eyes are on Colorado to set an example for the nation. If Colorado is not able to win the battle against fracking, it will be a sure sign the war will be lost for the country. 

Protect our water. Do not trust fracking. 

UNC Logo Redesign Explained

The University of Northern Colorado – my school – has recently released their new logo just in time for my last semester here. I couldn’t be more excited about it!

The University hired Torch Creative for the redesign in an effort to bring an end to the inconsistency of our branding. Our logo has been through several major changes in recent history. Most recently, in 2004, we adopted the “athletic bear logo” since UNC was entering into Division 1 in the NCAA.

This bear was fitting for athletics but was not something optimized for use in many other departments of the university. It did not have much of an academic prestige to it and would look out of place if used in that way. Because of this, academic departments were using the more professional looking “silhouette bear” which did carry itself more academically, but it was not very graphically interesting. It was certainly not something you would see on t-shirts or banners at games. To make matters worse, there were actually many more variations of UNC’s logos and visual branding. UNC had to stop using relatively small fixes and needed to invest in some professional help.

Torch Creative is a firm that specializes in visual branding for sports teams. They were able to create a professional yet ferocious logo that could be used for all departments of the institution. Graphically speaking, I personally see great improvement; the bear is abstracted enough to look like a logo and a mascot. At the same time it is realistic enough to where it is more mature and has a more subtle tone of aggression. The symmetry is a quality I appreciate as well.

I was actually never really able to fully get behind my University’s logo because I always saw it as a little cartoon-y and silly looking. I made jokes about it’s uni-brow, mascara lashes, vampire teeth, big glossy eyes, and an odd shape. In all, it always struck me as more of a high school mascot.

The logo change did however cause a bit of an uproar with students who were not happy with the change;  they missed the familiar face and the fierceness it had. A common criticism was also that they eyes were too small and the face wasn’t “scary enough”. Naturally, when you change a logo people have grown up with and have developed a personal connection to, they will always be upset. They created a Facebook group to get the old bear back which gathered about 1,700 students. They even wrote an essay about why they were robbed of the old bear back without popular consent.

I was part of the focus group they used to introduce the logo options to last year. Initially, we weren’t too fond of this new bear either but as we all talked about it, we started to change our minds. Already, many of the students who initially hated the new bear are already saying it is growing on them. I suspect the change was upsetting because they implemented it without the approval of the students and because when you are used to the old bear, the new one seems to be silly initially.

The eyes will seem microscopic if you are used to the big cartoon-y ones and the expression will seem tame if you compare it to the roar of the old one. Students will certainly grow to love it soon enough! And when the next generation of Bears come around and the new one is all they know, they would NEVER have it any other way. They will probably even laugh at the old version in time… just like we laugh about the fact that the school mascot used to be “The Teachers”

From both a branding and an artistic viewpoint, I believe this change is brilliant and a very welcomed improvement! I am very excited that I was able to see it come out before I graduated and I am also very pleased that I was able to be involved in the decision making process!

Well done, Torch! And welcome to the new, more mature Klawz.