Home Repairs: When to DIY and When to Hire a Pro
Buying a home for the first time is an exciting adventure filled with potential and possibility. And improving your first home is a fun way to make your mark and give it a unique personality. Your home purchase was most likely the result of years of planning, researching and saving, so you’ll want to be smart when it comes to making upgrades or remodeling. Should you do it yourself or dish out the cash to hire a pro? Before you dive into a home project ask yourself the following questions:
2. Are the materials required for this project expensive and will I use them again?
3. Does this project affect the structure of the home?
4. Does this project require knowledge of building codes, permits or fire safety regulations?
Hire a Pro
It’s perfectly normal to be intimidated by your first home, especially by the parts of the home you can’t see, like plumbing, insulation or electrical. There are reasons why we hire licensed plumbers, electricians, roofers and gas line installers: Mistakes can lead to hazardous conditions for the homeowner. Here are few situations where it might be better to hire help.
1. When Health Hazards Are Involved: Older homes sometimes have hazardous elements, like lead, asbestos, aluminum wiring or polybutylene piping. These will require a certified and licensed professional to expertly remove and replace. If not properly maintained, aluminum wiring (commonly found in homes built between 1965 and 1973) can become overheated and lead to electrical fires. Replacing it should always be done by a professionally licensed electrician. As a general rule, if the issue requires you to go into the “guts” of the home, leave it to an expert.
2. Removing Popcorn Ceiling: The ugly “popcorn” texture on ceilings and walls is a dated look that many first time homebuyers want to immediately change. Removing the texture is quite simple, but the reality is that removing several hundred square feet of textured ceiling, on a ladder, with water dripping down onto the floor can get very messy very fast. Professional drywallers understand how to best tape off and prepare the area and have the correct equipment to easily reach high or awkward places.
3. Making Major Structural Changes: In general, any time you add to your home, or make structural changes to the home, you’ll need to file for a permit. You may also need professional drawings, plans or verification of the designs from a licensed professional. Structural additions and changes often require changes to plumbing, electrical, heating/cooling or gas lines, and you’ll want to ensure that everything is built to code and has structural integrity.
4. Refinishing Hardwood Floors: In general, solid hardwood floors have a long lifetime, upwards of 100 years or more. But not every homeowner takes good care of their flooring and your new home may have spots, stains, scratches or dull spots. Refinishing flooring isn’t technically difficult but it is rather easy to make costly mistakes. Sanding down the top layers requires equipment rental and lots of vacuuming. Afterward, there are several applications of slow-drying polyurethane coating. Regardless whether you opt to do this yourself or hire a pro, this is a great project to get done before you actually move in.
Owning a home gives you a great opportunity to learn new skills, like how to properly hang a shelf, how to maintain appliances and how to check for damage. Even when you hire a professional, you’ll find yourself asking questions and gaining more confidence with bits and pieces of your home. Here are some great projects that even a novice DIYer should learn how to do to maintain a home.
1. Painting: Painting walls, ceilings and trim is a great way to instantly add personality and color to your new home. Keep in mind, the best paint jobs are all in the preparation. You’ll want to spend time to expertly tape off the area and protect the floor, move furniture out of the room or to the center of the room. Buy the right type of equipment for your surfaces and invest the time to choose the right color and paint type. Remember that even low VOC paint can irritate your lungs, so open the windows and bring in some fans.
2. Replacing Lights: Swapping out or replacing pendants or chandeliers is a pretty easy DIY. The most important part of lighting replacement is to locate your home’s breaker panel and turn off the circuit for that particular switch. Your home should have a well-labeled breaker panel, but if it doesn’t, hire an electrician to map it for you. If you have a number of lights you want to replace or want to add dimmers, fix old outlets, add sconces or have general electrical concerns with your new home, hire a licensed electrician.
3. Landscaping: One of the best places to make your personality shine is through the landscaping of the home. Your home’s curb appeal is an important part of maintaining the value of your home. Gardens take time to fully develop and seasonal changes create a constantly transitioning space. If you are a new to the craft but have enthusiasm, you’ll find no shortage of inspiration, ideas and opportunities to learn. Whether you decide to stick to plants or try your hand at produce, this is an opportunity to literally get your hands dirty and start experimenting.
4. Hanging Objects on the Wall: Properly hanging shelves, paintings, mirrors or televisions on the wall may seem easy, but you need to use the right tools for the job. Start by visiting your local hardware store. Have them direct you to the basic tools you’ll need as well as the right type of fastener for the project. It’s always helpful to bring in the item you’d like to hang and know what type of wall you’ll be affixing the object to. Most walls are made of drywall, which is rather soft. Behind the drywall are wood studs, which are placed every 16 to 24 inches apart. Knowing how the wall is put together will help you understand where to hang objects on the wall.
Do you have any home DIY triumphs or pitfalls? Share your experience with us in the comments below.
Welcome to Selfmade Finance School, our new money series with Block Advisors to help small business owners with their tax, bookkeeping, and payroll needs year-round. This week, we explore the tax implications of bringing family members into your business.
The question for today is this: Does hiring your family members make sense for your business? Let me be clear. This is not a piece about whether hiring your family members makes sense for your relationships with those family members. As someone who is part of a family business, I could fill up a lot more than 600 words on my opinions about that. For today's purposes, we focus on whether it makes sense from an overall "good business and tax implication" perspective. As it turns out, there is a decent amount of tax nuance when it comes to employing your family. Let's break it down based on relationship to the employee:
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Spouses Who Are In Business Together
Personally, if I had to be in business with my husband, it would not go well. However, many couples build viable, strong businesses together and I say, good for them! Depending on how you have your business entity structured, it will make a big difference on the tax treatment of you and your spouse working as partners. Because a business jointly owned and operated by a married couple is generally treated as a partnership for Federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. The election to file two Schedule C (Form 1040) forms, (one for each spouse) permits certain married co-owners to avoid filing partnership returns, provided that each spouse separately reports a share of all the businesses' items of income, gain, loss, deduction, and credit. Under the election, both spouses will be subject to self-employment tax and on net earnings from self-employment and receive credit for Social Security earnings.
One Spouse Employs Another
If you have a dynamic where your spouse is an employee of your business, then your spouse's wages are subject to income tax withholding, Social Security and Medicare taxes. If you are self-employed (not a corporation or a partnership), your spouse's pay does not have to be included in your federal unemployment tax account (FUTA) contributions and payments. However, if your business is a corporation or a partnership you must include that spouse's pay in your unemployment tax contribution calculation.
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You Employ Your Child
First, let's be clear. I work in my family business, but I am an adult, so I am treated just like a normal employee. However, if you, for example, run a family restaurant and want to hire your children under 18 to work for you, there are some tax benefits. But first, you should check with your state for rules on how many hours minors can work (in non-agricultural jobs) and reference the Fair Labor Standards Act for information on limitations on the kinds of work children can perform.
"This is an often overlooked or under-utilized strategy. Paying your children for true services they provide in your business can be a powerful tax-saving tool," says Cathi Reed, Block Advisors Regional Director. "If you are a sole-proprietorship or single member LLC, and the child is less than 18 years of age, the business is not required to withhold FICA or payroll taxes. The child can use his or her standard deduction against income you pay."
You Hire Your Parent
Oh dear. If you are brave enough to do this, know that you will need to pay Social Security and Medicare taxes on your parent's wages and make the appropriate withholdings, but you don't have to pay unemployment taxes. Now all you have to do is convince your parent that you are the boss. Have fun with that!
Is Hiring Family Members Worth It For The Tax Benefits?
"There are some positive tax advantages to hiring family members. It's important to treat a family member like any other employee. Hiring your children can result in substantial savings for businesses. Make sure your child has real, age-appropriate work to do and a reasonable pay rate, comparable to other employees. Consult with a Block Advisors small business certified tax pro to ensure that you are complying with all requirements," advises Reed. "Block Advisors, a team within H&R Block, is dedicated to meeting the tax, bookkeeping and payroll needs of small business owners year-round. To start working with the tax experts at Block Advisors, visit blockadvisors.com."
In my opinion, you should not hire a family member solely because of the tax benefits. You should always hire based on whether that person is right for the job and keep in mind how this hire could materially impact your relationship with that person and others in your family. Finally, as I mentioned, make sure you have a tax professional on your team when making these determinations. As you can see, things can get a little tricky!
*All details were sourced from IRS.gov and blockadvisors.com