On November 6, 2009, President Obama signed a bill into law that extends the $8,000 first-time homebuyers tax credit program, initially scheduled to end in November, to April 2010. The expanded tax credit is part of a legislation that extends unemployment benefits by at least 14 weeks in 50 states.
Besides extending the tax credit for first-time homebuyers, the program also makes a tax credit of up to $6,500 available to existing homeowners who are looking for a ‘step-up’ by selling their current home and buying another one during the same period.
While the first-time homebuyer tax credit has already helped many potential homebuyers transition into their first homes, expanding the credit to existing homeowners may help push more qualified buyers to purchase homes. Experts are debating over whether this extension will help revive the housing market and increase home sales or if it would only create another bubble in the market.
Below are the highlights of the new tax credit law:
For First-Time Homebuyers
First-time home buyers can claim the $8,000 tax credit by signing a sales contract before May 1, 2010 and close on the sale before June 30, 2010. Those who serve in the military and who are on extended duty outside the United States can claim the credit till July 1, 2011, provided they sign the sales contract before May 1, 2011. The maximum income limit for receiving the tax credit has now been raised from $75,000 for single buyers to $125,000. The income limit for married couples has also been raised from $150,000 to $225,000. A partial tax credit is available for single buyers making between $125,000 and $145,000 and for married couples making between $225,000 and $245,000. The tax credit does not have to be repaid unless you sell your home within three years.
For Existing or Repeat Homebuyers
Homebuyers who have lived in their current home for at least five years and wish to buy a new home are eligible for a tax credit of up to $6,500. The deadlines and income limits for repeat homebuyers are the same as first-time homebuyers. Both existing and first-time homebuyers are not eligible for the tax credit if the purchase price of the home is more than $800,000. The new home must be the homebuyer’s principal residence; the tax credit cannot be used to buy a vacation home.
Anti-Fraud Provisions
After the Treasury reported that many taxpayers who were not eligible for homebuyer credit had wrongly claimed it, certain anti-fraud provisions have been added to the new law. Those listed as dependents on someone else’s tax returns cannot claim the tax credit. Taxpayers must also be at least 18 years of age of the date of purchase to be eligible for the tax credit. Homebuyers will not be required to attach a copy of their settlement agreement to the tax return.
Brian Leibowitz is Owner and CEO of Affordable Financial Services.
Affordable Financial Servicesis a mortgage broker located in Long Island, New York, that provides loan process, refinance, home purchase, debt consolidation, and home equity loan services. The company provides clients with the knowledge they need to make the right decisions to move forward with the loan process. With its highly knowledgeable and professional mortgage consultants and processing department, Affordable Financial Services gives clients the best loans to fit their needs. As an industry leader, the company takes pride in its vast knowledge of the mortgage industry and the products it offers to borrowers. For more information, visit our Web site.
What happens if you realize that you made a mistake on your income tax return after it is already filed? First, don’t panic, it happens so often that there is a procedure in place.
You are going to have to do this filing all over again, but don’t get lazy and just let it go, figuring no one will notice. Depending on the mistake, you could get red-flagged for an audit or find yourself under suspicion of filing a falsified claim. Just get Internal Revenue Service form 1040X and start all over again.
The Internal Revenue Service will want to know what you filed on the return in error and what the actual numbers should be. They will also want to know how and why you made a mistake. There is an accommodation for removing or adding personal exemptions.
Even if filing an amended return increases your tax liability or causes you to owe rather than being entitled to a refund, you need to change it, no matter. If you don’t, you knowingly filed a false claim and that act is punishable by imprisonment. You can’t cry later, when the Internal Revenue Service catches up to you that you did not know any better and even if you could, you will still have to pay them back. Penalties, interest, and fines will have accrued since the day they issued your payment and you will be in deep.
The Internal Revenue Service is the best debt collection agency in the world. If you filed a return with wrong information that resulted in a refund to you, they are going to treat you like a thief. They will act as if you robbed them at gunpoint. The Internal Revenue Service Agents assigned to your case will no doubt be from the criminal division and they will have a United States Attorney itching to prosecute you. No matter how tempting it might be to “take the money and run”, there is no place for you to go. Just file the 1040X, because it’s easier in the long run.
If you made the same mistake in multiple years, you need to file an amended return for each of those years, individually. If you attempt to make changes for multiple years on one amended return, you will send up a glaring red light to the Internal Revenue Service.
If you hired a tax professional to file the return that needs to be amended, they should help you do that, but don’t just hand it off to them and forget about it. You, not the person who filed your return, are ultimately responsible for your own income tax return and every bit of information on it.
A passport ID can be used to replace worn passport books, which makes for frequent border crossing easy and convenient. The wallet-sized passport card is for easy wallet-sized transport and can be used by people crossing borders to Mexico, the Caribbean, Bermuda or Canada. The only drawback, however, is that the card is invalid for people who travel internationally using air travel.
This slim line passport device is a great alternative to standard passports for people who live on or near the Mexican or Canadian border and travel back and forth to the United States. The cards have a radio frequency ID chip, otherwise known as an RFID, installed in the card. Border patrol agents are specially trained to read information on the chip that is connected to a database that contains the cardholder’s passport information.
The RFID chip does no have any of the cardholder’s personal data on it, just information that pertains to the person’s passport.. Only authorized personnel can access the information and properly read the card using the database. The card comes with a protective blocking sleeve that protects the information from unnecessary and unwanted scanning.
These passport cards are made available to any citizen of the United States, even if they never had a passport before. Applicants must complete the necessary passport application, a DS-11 and send it in with accompanying identification and pictures. Someone who already has a passport can apply for an upgraded card and receive a discount on the price of the passport card.
Fees for passport cards are very economical compared with the cost of a regular passport. A standard card for a first-time adult purchase is $45.00 and children under 16 pay only $35.00. The passport book is more than twice the price at $100.00 for adults buying a passport for the first time. Individuals who want to switch from a paper book to a passport card only have to pay a modest fee of $20.00.
Passport ID cards last the same amount of time as a standard passport book. The adult card is valid for 10 years from the date of purchase and a child’s card can be used for five years using the same criteria. The cards don’t need to be renewed before the time period is up, so makes them very convenient to use.
While the cards can be purchased by mail, an overnight method won’t be of value due to the limited delivery options. The passport card is only returned to the applicant using the traditional first class mail delivery method. If an individual needs to get the card as soon as possible, they should look into another way of getting the card.
A Passport ID Card Can Make Border Crossing a Simple Process
