Items To Bear In Mind Regarding Tax Credits And Purchasing A Home
Posted on August 5, 2010
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The Worker, Homeownership, and Business Assistance Act of 2009 was an attempt to motivate the moribund market, and offers new home buyers a tax credit. This credit is generally around ten percent of the cost, up to a total of $8,000.
To qualify as a new home buyer, you cannot have owned your main place of residence for three years before this purchase. If you are married, this includes both partners.
Taxpayers’ dependents and those younger than 18 years of age are not eligible for the tax credit program. Also, the tax credit is applicable only to homes not more than $800,000, and will be paid back if the property is sold or once it is no longer the buyer’s principal home within three years after it was acquired.
Income limits of $75,000 for individual taxpayers and $150,000 for married or joint filers are eligible for the refundable tax credit if the primary residence was purchased between 01 January 2009 and 06 November 2009. Tax credit also applies to those with income not exceeding $125,000 for single taxpayers and $225,000 for married couples if the home was purchased between 06 November 2009 and 30 April 2010.
There are some forms to be completed and documentation needed to claim the tax credit. Buyers should complete the IRS Form 5405 and attach to this form a copy of the HUD-1 settlement form.
Where the HUD-1 is not applicable, a copy of the certificate of occupancy can be used in its place. For homes purchased in 2010, buyers can choose to claim refund on either the 2009 or 2010 tax return.
If you want to receive the tax credit, you need to have bought the place on or after the 01st of January 2009 and on or before the 30th of April 2010. If your binding sales contract was signed by 30 April 2010, your transaction must be completed before the 30th of June 2010.
Recently, there have been proposals for an extension of the deadline to close the transaction be moved to 30 September 2010. According to various realtor groups, the tax credit has created a rush to buy homes, which in turn created a big backlog in completing sales.
The individual has been blogging on tax relief for the previous four years. Moreover, this writer enjoys blogging regarding NYC real estate topics, including Midtown apartments as well as Sutton Place apts.
Tax Tips For The Self-Employed
Posted on August 5, 2010
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For anyone who is self-employed, it’s pretty obvious that working for oneself can be a lucrative endeavor. You have the luxury of being your own boss. With that comes the freedom to make decisions about when you work, who you work with and decisions about the day to day operations of your business or work. Unfortunately, you are probably aware that as a self-employed individual, filing taxes can be much more difficult and complicated. Whether you are a freelance writer, consultant or independent contractor, there are things you should know so that you do not set off red flags with the Internal Revenue Service (IRS) during next years tax season.
The first thing you will want to do is organize your freelance or independent income from other types. You will want to keep track of income reported on all Form 1099s. You will also want to keep track of all expenses related to your independent business this includes any supplies, advertising, repairs, legal expenses or other things required to do your work.
For example, if you get a website made or business cards printed in order to help promote what you do, keep track of those invoices. If you work from home, fill out Form 8829 so that you can calculate how much your home is used for business purposes and deduct that.
Set aside funds in order to pay taxes on how much you make from self-employment. You will likely be paying more than if you were traditionally employed because employers pay part of your Medicare and Social Security taxes. Unfortunately, you will be left to pay both sides of these taxes if you are self-employed.
According to the IRS, your service or business should make a profit three out of every five years of operation in order to qualify for tax write-offs. If not, you will be required to prove that your business is viable. If you find yourself facing a tax audit or other problem, find a profession who understands the complexities of self-employment taxes.
Guardian Tax Resolutions will help you obtain relief from the IRS today. Our professionals are experienced and qualified with significant expertise in resolving IRS tax problems.
Tax Sales Will Turn Your World Upside Down
Posted on August 4, 2010
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What is up with tax sales? Why do people keep talking about them? What are they so interested in? These are all questions that you may have recently been asking yourself, what with the sudden explosion on the web over tax sales investing. Tax sales are definitely worth looking into a learning a little about, because they can turn your financial world around for the better.
Tax sales are held annually; sometimes more often than that. They are auctions held by the government to recoup back due taxes. These properties are sold in the form on tax lien certificates – an opportunity to make a good interest rate, but necessarily gain a property – and through tax deeds – where the investor becomes the new owner of the property.
As an investor you can also attempt to purchase properties before the tax sales even occur. If you want to do that you’ll need to get yourself a copy of the list of properties that will be put up for auction. By visiting your county auditor or accessing their website you will most likely be able to secure a copy. The next step would be doing a bit of research and contacting the current owners.
While contacting the owners can seem a little bit intimidating there really is nothing to be concerned about. You will be able to learn more about the property and their situation through contacting them and can make an offer that they may refuse or they may not. The worst they can say is no and there is no harm in that. On the other hand they might sign over their deed to you for less than you would have paid at tax sales.
Make sure that you also research the properties. Research is essential to successful investment, because you need to know what you are getting yourself into. It is possible that the property could be in poor enough condition that even a small amount of money spent at tax sales would not be worth it. So, drive by, talk to the owners, do some internet research, whatever it takes to make a good decision.
Tax sales offer you an opportunity to make anywhere from 18 to 50 % in interest in only 1 to 5 years. They are a great way to get involved in the real estate industry for flipping, renting, leasing, or owning. You can also simply make some quick money by reselling the property to investors. Whatever your desires are, tax sales are definitely worth putting a little more time into learning about.
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