Tax Savings With Home Improvements

TAX SAVINGS WITH HOME IMPROVEMENTS? Looking to do some year end home projects? If you are you may qualify for tax credits.  Also, contractors might not be so busy during the holiday season making them easier to reach. Windows, doors, roofs, even appliances and HVAC systems are included in the list.  Projects only qualify on your principal residence and must be completed by December 31, 2010.

Check out this useful link to see what tax credits are available for your home improvement projects. A note of caution here: over the years many different variations of a scheme to encumber your house with a lien for improvements have been offered. Sometimes these are city or county programs sometimes they are offered through other organizations. Be careful about this. If you are planning to sell these programs can complicate the sale of your home or in some cases kill your chances for selling.

Don't forget to check with your city, county and even energy suppliers to see what programs, credits or rebates they may have for you.  For example many water companies will help you design a water saving landscape plan and gas companies will offer a free check up for gas appliance efficiency. Another option is to check out what appliances you could replace for newer more efficient models that come with a rebate. Sometimes these rebates are offered at the store or through your electric company.

For a more information on the projects most likely to increase the value of your home feel free to contact Michael.

Year End Home Improvements Net Tax Savings

Looking to do some year end home projects? If you are you may qualify for tax credits.  Also, contractors might not be so busy during the holiday season making them easier to reach. Windows, doors, roofs, even appliances and HVAC systems are included in the list.  Projects only qualify on your principal residence and must be completed by December 31, 2010.

Check out this useful link to see what tax credits are available for your home improvement projects.

Don't forget to check with your city, county and even energy suppliers to see what programs, credits or rebates they may have for you.  For example many water companies will help you design a water saving landscape plan and gas companies will offer a free check up for gas appliance efficiency.

For a more information on the projects most likely to increase the value of your home feel free to contact Michael.

Going, Going, Gone..... Before You Knew It!

California has come up with a new tax credit of up to $10,000 for first time home buyers as well as on new homes or homes never previously lived in. The program does not officially start ...and you can't even apply for it until May 1, 2010 but rumours are swirling that all the funds in the program maybe gone before the month is out.

The total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis. Needless to say if you want your share of these funds the time to act is May 1st. Call your lender now and be prepared to take advantage of this very generous incentive plan.

If you need A lender recommendation please see California Lenders

This Month In Real Estate

This Month the news covers the dramatic increase in First Time homebuyers in the market place.

Claiming Your First Time Home Buyer Tax Credit

If you are ready to claim your first time home buyer tax credit you will need to us the recently released Form 5405 from the IRS. Using this form first-Time Home buyer Credit and Repayment of the Credit, and the related instructions, eligible home buyers can now start to file their 2009 tax returns. Because of the late addition of this credit taxpayers claiming the home buyer credit must file a paper tax return due to the added documentation requirements.

The IRS expects to start processing 2009 tax returns claiming the home buyer credit in mid-February after it completes the updating and testing of systems to meet the law’s new requirements.

If you are one of the early taxpayers claiming the home buyer credit you may see tax refunds take an additional two to three weeks.

In addition to filling out a Form 5405, all eligible home buyers

must include

with their 2009 tax returns one of the following documents in order to receive the credit:

* A copy of the settlement statement showing all parties' names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
* For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
* For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Your Realtor or closing officer should be able to help you obtain these documents easily.

Don't forget that the new law allows a long-time resident of the same principal residence to claim the home buyer credit if they purchase a new principal residence. The qualification standard is using a home as a principal residence for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. The IRS has stepped up compliance checks involving the home buyer credit, and it encouraged home buyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:

* Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
* Property tax records or
* Homeowner’s insurance records.

With these new documentation requirements this mean that taxpayers claiming the credit cannot file electronically and must file paper returns. Don't forget that the tax credit is set to expire and you must be in contract on a home before April 30, 2010 and close before the end of June 2010.

Find out more using this link Yes, the IRS has You Tube videos! Who knew!

First Time Homebuyer Tax Credit

Many articles have been written summarizing the changes and the extension of the tax credit but here it is in Black and White right from the IRS website. I thought it would be easiest just to have this list:

If you are in the market for a new home, you may still be able to claim the First-Time Homebuyer Credit. Congress recently passed The Worker, Homeownership and Business Assistance Act Of 2009, extending the First-Time Homebuyer Credit and expanding who qualifies.
Here are the top 10 things the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.

1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.
2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.
3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.
5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.
6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
7. The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.
8. No credit is available if the purchase price of the home exceeds $800,000.
9. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
10. A dependent is not eligible to claim the credit.

For more information about the expanded First-Time Home Buyer Credit, visit IRS.gov/recovery.