RISMEDIA, August 29, 2009-First-time homebuyers aren’t the only ones to benefit from tax breaks. H&R Block urges homebuyers who are relocating for work or buying for other reasons to take advantage of incentives that can lower their tax bill. Plus, sellers should know how to report profits and losses to avoid a hefty tax bill.
“Now is a great time to buy or own a home,” said Amy McAnarney, executive director of The Tax Institute at H&R Block. “There are great tax incentives for buying and owning a home, whether you’re a first-time homebuyer or a repeat buyer. People selling their homes also need to know if they’ll need to report the profit to the IRS.”
BUYING A HOME
Homebuyers can make the most of several tax breaks that help lower their tax bill based on the purchase of an existing or new home. For instance:
-First-time homebuyers: The Recovery Act provides a credit of up to $8,000 if a taxpayer buys a home between Jan. 1, 2009 and Nov. 30, 2009. The homebuyer also must not have owned a home in the previous three years and the home must be the primary residence.
-Points: The points paid on a mortgage are generally deductible as interest if taxpayers paid enough of a down payment or earnest money at closing to cover the points. Homebuyers can deduct the points even if the seller paid them.
-PMI premiums: Buyers who make a down payment of less than 20% of the home’s cost usually pay private mortgage insurance (PMI). But the PMI premiums generally can be included in your home mortgage interest deduction.
-Job relocation: Taxpayers who moved due to a job change can deduct the cost of moving. In order to take the deduction, they must move within one year of starting the new job, work full-time at least 39 weeks during the first 12 months at the new location, and the new job must be at least 50 miles further than the old residence was from the old job. Qualified moving expenses include your out-of-pocket cost of moving yourself, your family, and belongings to the new location.
OWNING A HOME
If a taxpayer typically has claimed the standard deduction, owning a home will likely mean itemizing for extra deductions. Some tax breaks for homeowners include:
-Mortgage interest: For most taxpayers, the biggest tax break comes from deducting mortgage interest. Taxpayers can deduct interest on up to $1 million of the loan used to buy, build, or make substantial improvements to a main or second home. Interest on a home equity loan up to $100,000 secured by the main or second home is deductible too.
-Real estate taxes: Taxpayers can deduct real property taxes they pay on real estate to their municipalities, whether made directly or through their lending company.
-Home improvements and energy credits: The Recovery Act gives incentives to homeowners making improvements and energy-efficient upgrades to their homes. Taxpayers can get credits for 30% of the cost of qualifying doors, windows, HVAC, water heaters, roofing and insulation, up to a maximum credit of $1,500. Solar energy and wind energy systems are each 30% of cost with no maximum.
SELLING A HOME
Sellers won’t have to pay taxes on a profit up to $250,000 for single filers and $500,000 for joint filers. Taxpayers must have lived in the home for at least two of the past five years to claim this exclusion. In some cases, taxpayers can claim a partial exclusion if they are selling due to a change in employment status, health reasons, divorce or other unforeseen circumstances.
Taxpayers whose homes were foreclosed may be able to exclude the mortgage debt that was forgiven in connection with the foreclosure. This provision applies to debt forgiven in calendar years 2007 through 2012, of up to $2 million is eligible for this exclusion ($1 million if married filing separately).
“Homeowners should maximize all the credits and deductions available. Knowing the tax incentives and how to take them is key for homeowners,” McAnarney said.
# posted by
Anna-Lise Troup @ 12:03 PM
Builder Spec Home Ready for Quick Move-In in Rancho SahuaritaOne of my favorite builders in Rancho Sahuarita has a great spec home available for quick delivery. Gated community, single story, 2064 sq ft, 3BR/2BA, great room floorplan. Priced under $248,000 and other incentives available.
# posted by
Anna-Lise Troup @ 11:18 AM
Check out this article on the rebound of the U.S. housing market. In July we had the largest monthly increase in more than 10 years as first time home buyers rush to take advantage of the $8000 tax credit set to expire at the end of November.
# posted by
Anna-Lise Troup @ 11:14 AM
As of July 2009 active inventory was 6,208, a 26% decrease from July 2008. There were 1,160 closings in July 2009, a 24% increase from July 2008. Months of Inventory was 5.4, down from 9.0 in July 2008. Median price of sold homes was $169,000 for the month of July 2009, down 16% from July 2008. Tucson is experiencing an increase in buyer activity, with new properties under contract up 33% from July 2008.
# posted by
Anna-Lise Troup @ 8:01 PM
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# posted by
Anna-Lise Troup @ 7:42 PM
July was a stellar month in the Tucson MLS, we continue to realize a steady increase in residential sales in the Tucson market, with unit sales up, 3.9% over last month,23.46% increase over July 2008 and 90.05% over January 2009 numbers.
Although average sales prices are down 17.3% over last year, it remains consistent with the average list price being down by 17.44% and the average median price being down by 16.04% over July 2008.
Pending contracts are down 14.32% over last month but, up over July 2008 counts by27.81%. We continue to see a decrease in inventory with total active listings (6,075) being down 21.04% since January 2009, and at the lowest since December 2005 (5,457 units) and January 2006 (6,499 units).
Click on the title of this article to see the full report.
# posted by
Anna-Lise Troup @ 10:48 AM
If you have PCS orders you can receive advance pay and allowances with commander’s approval. These include advances on basic pay and Basic Allowance for Housing. Up to three months of basic pay at either the old or new duty station can help with out-of-pocket expenses, not typical of day-to-day military living. If you can not afford a PCS expense but expect reimbursement for it after the move then an advance in pay may be what you need.
Advance pay and housing allowances are repaid as paycheck deductions, normally beginning the month after the advance is drawn. With permission, repayment can be delayed up to three months.
Ideally, you should start saving for your next PCS as soon as you arrive at your duty station. Perhaps, setup a special savings account just for this purpose at your bank. Even saving just $20 a month will put you on the right track to finance your next move. A 1999 PCS Cost Study reported that the average service member in the U.S. Army spends $1,774 during a PCS that is not reimbursed. The average service member PCSing from OCONUS to CONUS spends $1,952 above what is reimbursed. So you can see how important it is to save. Many service members count on using an advance pay to finance their PCS. Since an advance pay is a form of a loan, it is wise to use this only as a last resort. Any type of loan must be repaid and this will decrease your income in the future. Unfortunately, we often heard stories of service members who took an advance pay, used it for expenses not related to the PCS, and still have to somehow cover those PCS costs. If you would like further information about how to prepare a budge in general or specifically to plan for your PCS, give you local family support center a call and arrange an appointment with the Financial Readiness Manager.
Article source: Military Avenue
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Helpful Sites:
http://www.dod.mil/comptroller/fmr/07a/07a_32.pdf - Page 4 of this document has a great summary of the purpose of Advance Pay.
https://secureapp2.hqda.pentagon.mil/perdiem/jftr(ch1-ch10).pdf - This site is the “Joint Federal Travel Regulations brought to you by the Per Diem, Travel and Transportation
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Anna-Lise TroupTucson REALTOR/Davis-Monthan AFB PCS Expert
Realty Executives
(520) 906-5659
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Tucson Real Estate, Condos, Homes for SaleFree Relocating to Tucson, AZ Information KitDavis-Monthan AFB Relocation Information---
# posted by
Anna-Lise Troup @ 9:35 AM