Blog Category: tax breaks

1st Time Homebuyers Tax Credit

There’s a $8,000 1st Time Homebuyers Tax Credit? The Homebuyer Tax Credit was passed earlier this year as part of the government stimulus package. Credit for those purchasing a home as their primary residence is worth 10% of the purchase price, up to $8,000. This credit is only available to those who have not owned a home for the previous three years. It can be claimed on your 2009 tax return. If the credit exceeds your tax liability, you will be refunded the difference.

If you move out of the residence within 36 months or cease using it as your primary residence, you have to repay the credit in full on your tax return for the year you move out.

The purchase of your home must be completed by November 30, 2009 when the Homebuyer Tax Credit will expire.

Many analysts fear that with the end of the tax credit, any resurgence in the housing market will slow down significantly or come to an end. So, it is worth noting that there is support in Congress and in the industry for an extension of the tax credit through next year. Rep. Johnny Isakson, R-GA, is leading the push in Congress for legislation which would include not only an extension, but also would raise the credit to $15,000, remove income restrictions and include non first time home buyers. Stay tuned to this blog for more.

piggy bank

401(k) Loan To Buy A House?

401(k) loan to buy a house? Is it a good idea to borrow against your 401(k) to get the down payment to buy a home? If your employer allows you to borrow from your 401(k) plan, and most do, you can take the lesser of 50% of your vested balance or $50,000. The typical repayment term is five to fifteen years. Read More


A 3.8% Tax On Real Estate Sales As Part Of Obamacare?

For quite a while I have heard rumors that so-called “Obamacare” was partly being paid for by a 3.8% increase in the capital gains tax on real estate. This is mostly not true. If you dig deep into the issue you will find it will not apply to most people. However, in principle, there is an increase in the capital gains tax on real estate for some wealthier folks. Read More

rich man

Accountants Don’t Live In The Real World

OK, it is time to fight. I am sure this will cause some anger. And possibly a heated exchange or two. But yes, I do think some accountants don’t live in the real world. They live in a fantasy tax world where taxes and tax decisions are the sole determining factor in all of the life decisions they encounter. I can see it now when told by clients who were expecting a child, an accountant having a stern response around the costs and tax implications of said child. Want to get married? Better consider the tax ramifications first!

Read More

Federal Tax Credits Renewed!

The tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence has been extended through April 30, 2010. There is also a new tax credit of up to $6,500 for qualified repeat home buyers. Read More

money 652560 1280

Gift Money And The Gift Tax

I often have people ask me if they can lend their son or daughter money instead of giving it as a down payment gift. Or some want to lend the money and then forgive the loan over time to avoid the gift tax. It seems many want to help their family but avoid taxes while they do it.

First, from an underwriting and mortgage guideline standpoint, this is not an option. Read More

calculate property taxes

How are property taxes calculated?

Property taxes are a part of the cost of owning a home. When you buy a home you not only have the cost of the monthly mortgage payment. You also need to consider property taxes, homeowners insurance, any HOA dues, maintenance, and utilities.

What amount will I owe?

Many people wrongly assume property taxes are a fixed cost. They believe whatever amount is billed when you first buy the house, is what the amount will be for the life of owning the home. However, property taxes can change quickly after buying a home. Most counties assess property value annually, and adjust the amount due annually. Read More

Percent Character rates

Interest Rates And Your Monthly Mortgage Payment

Many people are very focused on interest rates these days and are wondering where they are headed next and how it may affect their mortgage payment. Interest rates have been historically low for a very long time. And people are starting to fear that they may increase and have an outsized impact on the cost of purchasing a home.

You can see a chart of the long-term history of interest-rates by clicking here.  This chart shows that we are definitely near the bottom of where interest-rates have been over a long period of time. On the other hand, if interest-rates start to go up does it have as much of an impact as people think? Read More


Is Your Local Tax Assessor Over-Optimistic?

Is Your Local Tax Assessor Over-Optimistic? Many of us feel that property taxes have not mimicked the course of real estate values. According to an April study by the National Association of Home Builders, the most recent available, property taxes across the U.S. have increased by nearly 20% from 2005 to 2009. But wasn’t 2005 when the real estate bubble burst? How could property taxes have gone up from 2005 to 2009? And over the same period, home prices in major urban markets decreased 31% Read More

Mortgage House Money

Prepaying Your Mortgage Saves You Money, But How?

Prepaying your mortgage is a great idea if you can afford to pay extra. Especially if you are going to be in your house long term, or forever. The best way to save money on debt is to not have it! But many people do not realize that prepaying a fixed rate loan does not reduce the monthly payment. Prepaying a loan simply shortens the term. So prepayment builds equity faster, and ends the loan sooner. You save money by having the loan for a lesser amount of time. Read More


Tax Credits When Buying In Washington DC?

When buying a home in Washington, D.C. you should work with a lender familiar with Mortgage Credit Certificates (MCC’s) and who is participating in the MCC Program.  A Mortgage Credit Certificate allows eligible borrowers to claim a Federal Tax Credit of 20% of the mortgage interest paid on the mortgage during each calendar year.  The remaining 80 percent of the mortgage interest paid for that year may still be claimed as a tax deduction. Read More