Tuesday, September 20, 2011

5 Easy-To-Use Tax Strategies For Every Home Owner

1. ,000 First-Time Home Buyer Tax Credit

Nearly everyone has heard about the ,000 tax credit. If you can get this government money you should! You will want to ensure you qualify so you're not disappointed.

First Time Home Owner

Who is Eligible for the Tax Credit?

Can you claim the tax credit?

First-time home buyers purchasing any kind of home - new or resale - are eligible for the tax credit.

What is the definition of a first-time home buyer?

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.

How Does it Work?

How is the amount of the tax credit determined?

The tax credit is equal to 10 percent of the home's purchase price up to a maximum of ,000.

Is a tax credit the same as a tax deduction?

No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes ,000 in income taxes and who receives an ,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes ,000 in income taxes. If the taxpayer receives an ,000 deduction, the taxpayer's tax liability would be reduced by ,200 (15 percent of ,000), or lowered from ,000 to ,800.

Are there any income limits for claiming the tax credit?

Yes. The income limit for single taxpayers is ,000; for married taxpayers filing a joint return, the limit is 0,000. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than ,000 for single taxpayers and 0,000 for married taxpayers filing a joint return. The phase-out range for the tax credit program is equal to ,000. That means the tax credit amount is reduced to zero for taxpayers with MAGI of more than ,000 (single) or 0,000 (married) and is reduced proportionally for taxpayers with MAGI's between these amounts.

How do you claim the tax credit? Do you need to complete a form or application?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to make sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.

What types of homes will qualify for the tax credit?

Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes such as townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the 0,000 / 0,000 capital gains tax exclusion for principal residences. It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.

2. Paying Points

A point is 1% of the loan amount and, when properly spent, can make a huge difference in your monthly payment.

Buyer Pays Own Points on Purchase

If you buy a home this year, the points you pay are tax deductible. Points are typically paid to lower your interest rate on your loan. They can be considered a form of upfront interest which is why they are tax deductible.

Seller Pays Own Points on Purchase

If the seller pays points for you as a seller paid closing cost you wouldn't think that would benefit your taxes... but it does! Even if the seller pays points for you, you still get to deduct them. You'll get a lower interest rate, a lower payment, and higher tax deduction.

3. Writing Off Your Mortgage Interest

All the mortgage interest you pay on your loan, up to ,000,000, is tax deductible. This is different than the tax credit because you do not get to deduct the full amount from your taxes, but rather from the income on which you pay taxes.

The following are two ways in which you can effectively write off your mortgage interest. One will save you money monthly and the other acts as a yearly savings account with the government.

Saving Every Month by Adjusting Your W-4 (For W-2 Paid Employees)

The deductible interest you pay on your mortgage can be "cashed-in" on a monthly basis. In fact it can raise every pay-check you get over the course of the year. Your W-4 is also called an Employee's Withholding Allowance Certificate. It allows you to determine how much money you want your company to withhold from your paycheck to pay your taxes at the end of the year. In order to raise the amount of your paycheck, you simply raise the number of "allowances" you are claiming. A higher number of allowances means less tax withholdings, thus giving you a bigger paycheck. You may use this strategy to increase cash flow for investing or paying bills. Many people also use it because they don't want to give the government their money in the form of a tax free loan. Your employer should be able to provide you with a W-4.

Saving Every Year with a Government "Savings Account"

If you prefer to have a large tax refund every year, then buying a house is still for you. Instead of claiming more allowances, you can simply leave your W-4 alone. You will still get the same amount of deductions from your taxes. In this scenario, instead of getting your money in every paycheck, you will get your money next year with a larger refund.

Ultimately, the choice is yours! Some people like to get their money on a monthly basis and some people like to know they have a sizable chunk of cash coming at tax time the following year.

4. Writing Off Your State and Local Property Taxes

As long as we're talking about writing off your mortgage interest, we should also discuss writing off your state and local property taxes. These taxes are deducted the same way as mortgage interest and you can get the money by adjusting your W-4 or waiting until the end of the year.

5. Selling without Paying Capital Gains or Income Tax

Even when you sell your house, the government will keep giving you tax breaks! In fact, married couples can earn up to 0,000 in tax-free income when they sell their home.

As part of the 1997 Tax Act, single homeowners can realize a profit of 0,000 without paying taxes when they sell their house. The key to saving thousands of dollars on taxes is to understand the 2 out of 5 rule.

What is the 2 out of 5 rule?

Sellers must have not only owned, but also occupied the house as a principal residence during ANY 2 of the last 5 years. That's right...ANY 2. This means you can live in your home for 2 years, then rent it for almost 3 full years before you must sell to qualify for this tax savings.

How can you benefit from it?

On top of the tax free income you'll receive, the money can be spent anyway you want.

A huge misconception is that you must actually "roll" the proceeds in to a new home in order to keep the tax deductions. In reality, the money is yours, tax free, to buy a home, invest, pay bills, or spend!

To Sum It Up:

As you can see, people buy houses for many reasons...

To raise a family or settle down, as an investment or a second home, to remodel or flip, or maybe it's just to paint the walls ANY color they want! It seems like there are as many reasons to buy a house as there are people.

Saving money on your federal taxes is just another reason for you to consider home ownership. You can literally save thousands of dollars per year (or hundreds every month) by using the 5 tax strategies outlined above!

5 Easy-To-Use Tax Strategies For Every Home Owner

Sunday, September 18, 2011

Buying a House afterwards Bankruptcy - Loans Options for First Time Home Buyers

Having bad credit will greatly affect your credit applications, especially if you have filed bankruptcy. If you have previously owned a home, and maintained a good payment history, lenders may give you a loan following a bankruptcy. However, if you are a first time homebuyer, expect lenders to be leery.

Loan Options for First Time Homebuyers

First Time Home Owner

First time home buyers have several loan options. There are loan programs that offer down payment assistance, closing costs assistance, and low interest rates. These amazing benefits are designed to help you obtain a loan. Of course, to qualify for most first time home buying loans, you must have good or fair credit. Mortgage companies have specific guidelines. If you have a recent or past bankruptcy, your loan options will differ from an individual with good credit.

Increase Your Chances of Getting a Home Loan after Bankruptcy

Attempt to open new credit accounts immediately following a bankruptcy. When applying for a mortgage, lenders need to see some signs of credit improvement. Thus, you should wait at least one year before applying for mortgage loans. While a wait time of two years is recommended, if your credit improves significantly within a year, lenders may give you a home loan with acceptable terms.

During the period of rebuilding and increasing your credit score, keep credit accounts current. Defaulting on loans or receiving charge-offs following a bankruptcy is bad. In this situation, getting a home loan is practically impossible. While sub prime and high risk lenders are dedicated to offering bad credit mortgages, they will not give you a loan if you continue to be irresponsible in regards to credit.

Purchase Your First Home with a Down Payment

Applying for a mortgage loan with a down payment is recommended for first time homebuyers with a bankruptcy on their credit report. Saving for a down payment is difficult. However, it will raise your chances of receiving a good deal. Establish a budget. Lenders do not require large down payments. The average down payment for a home is about 3%.

Traditional Mortgage Lenders vs. Sub Prime Lenders

Moreover, apply for loans through lenders that work with bad credit and bankrupt applications. Do not waste your time by submitting applications through banks or mortgage companies. While these lenders may offer non-conventional loans, the interest rate is extremely high.

Instead, apply for mortgage loans through sub prime lenders. Sub prime lenders offer loans to individuals with low credit scores, bankruptcies, and no credit. The rates and fees for these loans are affordable. Do your research and obtain quotes from three or four lenders. Compare their offers, and choose the mortgage lender with the most attractive terms.

Buying a House afterwards Bankruptcy - Loans Options for First Time Home Buyers

Saturday, September 17, 2011

What is the most powerful question a homeowner can make sale of his house?

Home before selling his home for a real estate investor can be a daunting task, or it can be very easy if you learn some techniques of perspective qualification. The investor must meet a specific need or a solution to a problem that a broker can not simply listing your house on MLS and waiting to be sold to provide the property. One of the largest to meet the needs of investors is a quick sale and closing cash. However, most investors and home owners frustratedI can not get their minds too quickly on the sale, but there is a simple solution.

Making the ability of homeowners to a quick decision on whether it is motivated and has his home and, ideally, has some sort of deadline by an external force imposed capital costs determined. These forces are external to the death of inheritance, foreclosure, divorce and a lawsuit, just to name a few. When investors are homeowners to sell their property, they should ask a prospectSeries of questions about the sale of properties and characteristics to determine if the owner is truly motivated to sell or purchase price only.

First Time Home Owner

Often the house say they want to sell "yesterday", but in the next breath, are inadequate for a price to ask. Unreasonable for investors at any price, where the investor can quickly and safely wholesale property market. The fact is that if the landlord wants to sell to its price, but must not sell, is notvery motivated.

What investors need to owners of houses and flats that must sell their homes and even better at a certain date in the future. The owners of houses and apartments are motivated, others are mostly shops and are not really willing to accept a solution only by a sky high price to accept. One of the best ways for a seller to determine the motivation is to simply ask the harder question of qualification: "Why do not you sell"

The only question is so important, because the sellerusually tell you the truth about your empathy for the fact that he won for the sale. You can then make a schedule for him to move and we know now that you work with someone who has to work at home, not just a customer has to sell. Shoppers finally become motivated sellers, but can last for years. Persistence in the follow-up is often the deals that seemed impossible when he approached the seller.

Just because the seller does not say, two or even three timesor more does not mean it does not sell at a price where you can make a profit, it is simply not ready yet. Some of the greatest opportunities we have had have come up with a profit of over $ 100,000 in family homes in the price range of less than $ 125,000, months after we had originally made a proposal to the seller.

In addition to screening for the level of motivation of the seller is perseverance to the seller over and over again and not a "no" for an answer.Pre-selection of suppliers with demand strong qualifications, "Why do you sell?" It is' the key to saving time and money to invest and make more profits in real estate.

What is the most powerful question a homeowner can make sale of his house?

Friday, September 16, 2011

Residential New funding programs - grants for first time home buyer

If you are thinking of buying a new home, there's no better time than now. Property prices are at the bottom, there are many places around the country to get a property below the market value of the means used. This does not mean that house prices can not go on a bit ', but in the long run this is a great buying opportunity.

Not only is this a good time for a new home because of the great, the buy out there, but also for the incredible incentives.Lenders, vendors, and so give incredible opportunities to help you move.

First Time Home Owner

In addition, there are programs available, you may be able to qualify in your area. These are not necessarily new. But it seems to be more resources, or at least awareness, this program is now more than ever.

Receiving a grant for the first time home buyer, you could get free money for the purchase of your home, going to ever be repaid. Notjust not free cash, but money is awarded, taxed. First time home buyer grant are not the only types of grants that people can apply.

To grant the search an online database, age 18 years and everyone will find many programs that may be able to receive quality. There is no limit to the number of scholarships that can be achieved, but it makes sense only for those who are most likely to qualify to apply. So you can not waste your time orgrant reviewers.

Residential New funding programs - grants for first time home buyer