Tax Deductions for Homeowners

Home ownership has always been a source of tax benefits and deductions. Whether you purchased your first home in 2010 or have been a long time homeowner, remember the following items when doing your taxes or talking with your tax accountant. Any or all of them may be deductible for your 2010 tax year:

• Mortgage interest.
• Points purchased.
• Private mortgage insurance.
• Real estate and property taxes.
• A portion of your moving expenses if you relocated for work.
• Home improvements made specifically for medical reasons.

Restrictions may apply for who may take deductions for some of these items. Talk with your tax accountant or visit the IRS website for more information.

Current Homebuyer Tax Credit

New $6500 Tax Credit for Current Homeowners

Are you eligible for the $6500 tax credit? We covered the details in December, so take a look if you want to check. There are 73 days and counting left to get an accepted offer.

You must have an accepted offer in place no later than April 30 and close on the home no later than June 30 in order to qualify for this tax credit.

About that new $6500 tax credit

Much press has been given to the first time home buyer's tax credit, but the newest incarnation of the tax credit includes another very interesting element - the $6500 tax credit available to current home owners.

Not every current homeowner will qualify for this tax credit. Here is a summary of who is eligible:

• You have lived in the home your currently own for at least five consecutive years of the last eight years. This is very important detail that can help those home owners who have had to relocate for work purposes and who have been unable to sell their former home yet.
  
• You are purchasing a home for your primary residence. It does not matter if you are purchasing a traditional single family home, a condo, a townhome or a half duplex as long as it will be your primary residence. Investment and vacation properties do no qualify.
• Your income must be less than $225,000 for a married couple or $125,000 for a single person to qualify for the full tax credit. If your income is between $225,000 and $245,000 for a married couple or $125,000 and $145,000 for a single person, you will receive only a partial credit.
• The home you are purchasing must be less than $800,000.
• You must have an accepted offer to purchase no later than April 30, 2010 and you must close on the property no later than June 30, 2010.

As with the first time home buyer's tax credit, the amount of the credit is based upon the purchase price of the home. The tax credit will be equal to 10% of the purchase price of the property up to a maximum of $6500. If you are purchasing a property that is less than $65,000, your tax credit will be 10% of your purchase price only.

You will need to live in the home for at least three years. If you live there for less than that, you will need to repay the full amount of the credit.

This tax credit is exciting because it helps not just young families move up in their homes as many of these programs normally do, but it also help empty-nesters and retirees who want to downsize.

Call to Action

The $8000 First Time Home Buyer's Tax Credit has been a boon to many across our county this year. However, this credit expires on November 30, 2009. The National Association of Realtors is encouraging people to contact their congressional representatives and urge them to vote to extend this credit.

Several analysts credit this program with helping home prices and home sale rebound in many parts of our nation. However, there is concern about what will happen when the credit expires. To quote a recent article in the Washington Post, "If the first-time homebuyer tax credit expires as scheduled on Nov. 30, many analysts expect a drop in home sales and prices, though they disagree on how big the drops will be. The situation looks even more dire once swelling unemployment numbers and related delinquencies and foreclosures are factored in."



If you would like to take action and send a message to your representatives, this link makes it easy for you. Put in your name, address and email address, and the system will send out a message to your representatives.

First Time Home Buyer's Tax Credit

60 days and counting for the First Time Home Buyer's $8000 tax credit...

This video is from last spring, but it does a nice job covering information on the tax credit itself. Time is running out, so if you want to take advantage of this tax credit, contact us today!

Don't miss out on the tax credit

August 28 already. Back to school time is here. Labor Day is just around the corner. How quickly this year has flown. Four more months left in the year.

Three more months before the $8000 first time home buyers tax credit expires.

Three months. That is about 90 days. 95 days including today to be specific.

Are you or someone you know hoping to take advantage of this tax credit? Time is running out. You must close on a home on or before November 30, 2009 in order to claim this credit.

Considering that the average closing happens about 30-45 days after an offer is accepted, there is not a lot of time left to find the perfect first home. If you are writing an offer on a short sale home, it can easily take 60-90 days to close, sometimes more.

Now is the time to be looking for your home if you want to take advantage of this offer. There are great homes out there, and with inventory very high right now, local sellers are willing to negotiate considerably more than they ever have in the past.

Give me or Luis a call if you are thinking of looking for a home. We will be happy to show you what is currently available in the area, and we can help you connect with a reputable mortgage banker who can help you figure out what you can afford in a home. Our market has houses from under $75K to hundreds of thousands, and everything in between. People start at all price points, and each buyer is valuable to us.

95 days and counting. Don't miss out on this credit; call us.