Archive for March, 2011

Another exam, Another license – Why I took Texas Real Estate Salesperson License Exam?

Many of friends were puzzled after hearing my recent action about passing yet another exam. That’s right, I took the Real estate Salesperson license exam and passed with flying colors last weekend. Being an IT guy, they know that I already went out of the league to clear the CFP exam inthe first attempt and now Real estate license exam. What’s going with this guy? Is he going crazy by just taking exam after another?

I did answer few of them but decided to post this blog so it might also help others out there who is thinking about making a career change or add more feathers to their hat to take a part time career when it gets tough in these hard economic times.

Real Estate Investing

I started my real estate venture in 2007 when I bought my first rental property. I am well experienced as an investor and part time rental property owner by taking on all sorts of issues with my property staring from fixing problems, hiring handymands to evicting the tenants. After all that, I bought my another property last year and currently both of them are paying themselves with few issues now and then.

With this rental propert experience, I been encouraging and mentoring few of my friends to invest on rental property. Few of them already invested and reaping the rewards of the current good real estate investors market. 

Why do I need Real estate license?

With this sound background in real estate and CFP knowlege, I thought why don’t I start putting the dots and dots together. That way I can help out people in setting their financial house in order and also assist them buying their new home or invest in the rental properties to include in their portfolio. 

In order to do that, I felt it’s better to have the real estate license so I can legitimately help the clients on their home search, negotiate offers for them and also get into property management in the future. Depending on the clients risk tolerance, I am planning to offer different strategies in real estate so it won’t be burden for them.  That’s the whole idea behind getting yet another license so I will have flexibility to help people by doing things in the right way possible.

What are other benefits of having Real Estate Salesperson license?

At the same time, I figured there are other added benefits in having the real estate license.

1. When I buy another property for investing, as buyer’s agent I will save time sending offers quickly instead of depending another agent. Also I even get 3% buyers agent commission which can help with my closing.

2. I can also help friends and families by giving commission rebate who are either planning to buy new home or resale home . It is allowed in Texas if disclosed in papers. That might help with their closing as well.

3. Finally, I can also able to earn some commission out on purchasing investment properties for the clients even after giving some commission rebate.

It seems like lot of advantage to have the real estate license. As always there are two sides to a coin and so far I talked about the good things. But I didn’t talk about the other side. I came to know about expenses and other hassles related in getting and carrying a valid license which I will discuss in the later post.

BTW, I came to know if I need to practice my CFP before getting CFP certification as a independent planner I need to have Security 65 license. I also need to be registered with State and FINRA which is lot of paper work and more fees.  So I havn’t decided about going through that route or find a way out. Don’t be surprised if you hear I am preparing for another exam.

Watts Premier Reverse Osmosis will be on sale at Costco for $149.99

It is a damn good price with saving of $40 from the costco’s original price. Currently selling for $189.99 at and $249 at store. This offer is from Mar 28 – April 25, 2011.

It is a 5 stage VOC filteration system capable of filter most of the contamination and bad things in the water. It uses 3 filter and a membrane. Filters cost around $15 for 6 months and membrane which is $75 needs to change only every 2-5 years or so depending on the water quality. Installation is reasonbly easy and doesn’t take a long time if you are do-it-yourselfer.

I been using this same Watts WP-4v RO system for well over 4 years. It has always given good tasty and healthy water and saved me a lot of money and time as well. Actually I am upgrading my old system to new one by taking advantage of this offer because I need to change my membrane anyways which is around $75. So if I buy this system for $150, I get new membrane and new filters and new system for another $75 extra which can run for another 4 years or more.

Let me do some math to help you out. If you are family of 2 and uses 10 gallons of drinking water by buying 5 gallon Ozaka water pack in Costco for $4.50. You will be spending approximately $9 per week which will come out to $468/year. If you buy this system, $149+tax as one time investment and $35 for filter per year which is an on going expense of only $35, saving $400 or so. Only disadvantage on any RO filteration system is it takes 3 gallons of water to make 1 gallon of good water. So you might pay extra for the water every month. Even if you pay $10 extra on your monthly water bill and spend $75 after 2 years for membrane, you will still save a lot and more in the long run.

I strongly recommend to take advantage of this offer starting next week if you are looking for a filteration system which is less expensive and does the job right giving you good water for drinking as well cooking.

Click to check out more details about the system.

Image source –

Tax time doubts and dilemmas…

With the tax season on the way and Tax “D” day is fast approaching, I am sure many of you are heading over to get help from your favorite Tax preparer or CPA. Tax is always complicated with many codes, rules and limitation which often changes every year making it hard to follow. Even for CPA’s, it takes time to check the code and see whether particular rule applies for certain client unless it’s a common one. 

In that case, as an individual it is normal to doubt our capability to see whether a certain situation or event triggers any taxing advantage or not. Here are some of the common doubts and dilemmas arises in the mind of common Tax filer,

1. Whether I must file or not?

The question should be actually whether you must file or should file. It all depends on one’s gross income, filing status and age of the person. If your filing status is joint and your joint gross income is above $18,700 and your age is under 65, then you must file. Similarly if you are single under age 65 with gross income is less than or equal to $9350 then you must file. If you did not live with your spouse at the end of 2010 (or on the date your spouse died) and your gross income was at least $3,650, you must file a return regardless of your age. So it is a combination these 3 important factors. 

May be you are not required to file according to the conditions, but you should consider filing it anyway if you are eligible to receive a refund like income tax withheld from your pay, estimated tax payments or had a prior year overpayment applied to this year’s tax and more..

2. Whether to claim a person dependent or not?

Generally you can claim a person as dependent for dependency exemptions only when they are a qualifying child or qualifying relative. If you are the dependent of another taxpayer, you cannot claim any other person as a dependent.

Qualifying Child and Qualifying Relative can only qualified to be as dependent if they qualify their own dependent test. For a qualifying child, we have to test for Relationship, Age, Residency and Support provided. For a qualifying relative, you have to check first they are not qualified child, Relationship, Gross income and Support provided. If all these conditions satisfy, you can claim a person as a depending to use $3650 exemptions.

3. Can I file Married Jointly?

There are 5 filing status as per the tax norms in order to find the right standard deductions and also to find other tax deductions and limitations.

Single, Married filing joing, Married filing seperate, Head of Household and Qualifying widower.

The martial status is determined by whether you are married at the last day of the tax year. If you are divorced and/or seperated with divorce decree and not living together, you will not be considered married. You are considered married if  you are married and living together as husband and wife, you are living together in a common-law marriage, where recognized in the state you live in or in the state where the common law marriage began, you are married and living apart but not legally separated by a divorce or separate maintenance decree and you are separated under a temporary decree of divorce.

4. Can I file seperately even though I am married?

It all depends on your personal situation. You can be married but still can file seperately but it will usually lead to higher taxes and lose out on certain advantageous AGI limitations. For example, your IRA contributions can be limited depending on your AGI and filing status. If you file jointly your AGI should be $89,000 but less than $109,000 to take the deduction.  If you are filing married separate, then your deductible phase out starts at under $10,000. That’s big difference.

Similarly Education credits like lifetime learning credit, American Opporunity Credit depends on the AGI limits. So be wise while chosing to filing joint or seperately. If you and your spouse elect to file jointly, you both can be held responsible, separately or together, for the tax and any interest or penalty due on your return. 

5. Can I claim my moving expenses?

Hope many of you know that you can claim your moving expenses related to your job change. There are couple tests like Distance and Time test needs to be satisfied in order to be eligible for claming this deduction. Things like the cost to transport goods, driving to the new location, storage and lodging expenses all deductible except the meals.

For 2010, the standard mileage rate for using your vehicle to move to a new home is 16½ cents a mile. If you are reimbursed certain amount, you can only claim unreimbursed part of the moving expense and not all of it.

There are limitations and exceptions for moving outside US, so check the website for more info. 

6. Do I show Unemployment insurance payment as income?

Finally an important item as many people around nation are still under unemployment insurance payment because of tough economic conditions.

For 2010 taxes, all unemployment compensation is taxable. So, if you do not have income tax withheld, you may have to pay estimated tax. See Estimated Tax for 2011 , later.  If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty

To see more details on these topics, check out websites, and

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