Atlanta Realty Blog

Homeowner Consequences of a Foreclosure vs a Short Sale ~ posted by Melanie Bailey

The following shows the difference in how these two processes affect your credit rate, ablility to obtain future loans & more:

  

$ 8,000 Refundable Tax Credit for First Time Homebuyers - Good for closings through November 30, 2009! ~ posted by Melanie Bailey

First-time homebuyers should begin planning now to take advantage of a tax credit included in the recently enacted American Recovery and Reinvestment Act of 2009, commonly referred to as “the stimulus bill”.

The Credit

Applies to home purchases on or after January 1, 2009 and before December 1, 2009.

The credit is equal to 10% of the purchase price of the home up to a maximum credit of $8,000.00

Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.

Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

First-Time Homebuyer and Qualifying Home

A taxpayer is considered a first-time homebuyer if he/she had no present ownership interest in a principal residence in the United States during the three-year period prior to the purchase of the home to which the credit applies. Thus, a prior owner of real estate may qualify if the three-year test is met. If a taxpayer owned a vacation home but not a primary residence within the last three years the taxpayer will be eligible for the credit if purchasing a primary residence.

 

When and How to Claim the Credit

Eligible homebuyers may claim the credit on their 2008 income tax return for qualifying purchases in 2009. Thus, in certain cases, one may be able to get a refund of the credit shortly after the purchase closes.

Income Limits

The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income adjusted for various amounts excluded from income—for example, certain foreign income. For a married couple filing a joint return, the phase-out begins at $150,000. For other taxpayers, the phase-out begins at $75,000. This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less

Credit Recapture

The credit for new homebuyers is recaptured if the home is sold within three years of the date of purchase. Exceptions will be made in certain cases such as sales that occur because of death or divorce.

If you or someone you know may qualify please feel free to contact us Or please pass this along to your friends, family and co-workers so they can take advantage of buying a home before the November 30th deadline.

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Tax Deductions Not to Overlook ~ posted by Melanie Bailey

Believe it or not, as taxpayers, we may overlook some seemingly obvious deductions that could save us more of our hard-earned money. Here are some of those items to keep in mind when tax time is looming. Remember, if you're ever unsure about a specific deduction, ask a trusted tax preparer, or visit www.irs.gov for more information.

Vehicle excise tax. If you get a bill from your state or local government charging you a tax for owning a vehicle, you may be able to deduct that tax. You can also get the tax deduction if you lease a vehicle and your finance company bills you for the tax.

Job-hunting expenses. It pays to save your receipts for job-hunting expenses. These expenses are deductible if they were incurred to locate a new job in the same line of work.

Real estate taxes. Also, don't forget taxes you paid indirectly, such as taxes paid through a mortgage escrow account. If you bought a house, check your settlement statement for any taxes which you reimbursed the seller at the closing, too.

Cost of tax preparation.Tax software expenses, preparation fees, and other tax-filing expenses are all deductible on your tax return as a miscellaneous itemized expense. Be careful to deduct them on the return for the year in which you paid the costs.

Estate tax. If the estate of the person who died was large enough to trigger estate tax, find out the amount of estate tax attributable to the IRA distribution. This amount is tax-deductible.

Capital loss carryover.If your capital losses are greater than your capital gains, you won't have to pay tax on the capital gains. If you have a capital loss one year and a capital gain the next year, use your capital loss carryover to reduce your taxes in the later year.

State tax you paid in April with your return. If you owed taxes when you filed your last state tax return, that check you wrote could help you when it's time to pay your next year's taxes.

Reinvested dividends.Often a mutual fund account is set up to automatically reinvest dividends in additional share purchases.

Credit for excess Social Security tax. If you worked for more than one employer during the year, look into the credit for excess Social Security tax.

Non-cash contributions.If you've donated clothes, furniture, or other items to a charity, the value of your donated items is deductible. Always get a written receipt. With non-cash charitable contributions, no receipt means no deduction if you're audited.

New points on refinancing. Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan.

Old points on refinancing. Lots of people miss this one. All unamortized points on an old refinancing are deducted in the year of a new refinancing.

Health insurance premiums. Any health insurance premiums you pay are potentially deductible. You have to add these to your total medical expenses, however, and they have to exceed a certain percent of your adjusted gross income (AGI) before they give you any tax benefit. If you're self-employed and not covered by any other employer-paid plan, you can deduct 100% of your health insurance premiums.

Investment and tax expenses. Many of us forget tax planning and investment expenses because they are part of miscellaneous itemized expenses. Expenses to track include your employee business expenses, tax preparation fees and even the portion of your legal or accounting fees relating to tax planning.

Casualty deductions. If the area where you live has been declared a disaster area as the result of a hurricane, flood, wildfire, tornado, etc., you may claim your loss on your next tax return.

Retirement tax credit. This deduction/credit is designed to give moderate and low-income taxpayers an incentive to save for retirement.

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Fulton County Tax Goof ~ posted by Bill Wright

Rumors abound about the fact that Fulton County's tax system has been offline since July 18, 2008.

According to the Fulton County website - Most Fulton Homeowners Will See Decrease or No Change in 2008 Taxes: More than 85 percent of residential property owners will see either no change or a decrease in the Fulton County portion of their 2008 property taxes, compared to 2007. This is due to either no change or a decrease in property assessment.

What is causing these discrepancies?

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