Posts Tagged ‘IRS’

MCC. FREE MONEY FROM THE IRS

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Many States, Counties, and Cities have great programs to help 1st Time home buyers, but few if any are better then the Federal Governments Mortgage Credit Certificate (MCC) program.
This turbo charges the existing TAX DEDUCTION for mortgage interest by allowing 15% of it to be taken as a TAX CREDIT.
Here’s an example:
If you pay mortgage interest of $24,000/year you can take 15% of that ($3,600) and deduct it dollar for dollar from your total tax liability.
To put it simply; if your total tax bill was $20,000 it will be reduced to $16,500. You have now got a tax free pay raise of $250/m.
You can now tell your employer to reduce the amount they take from your paystub so you get the benefit of this right away with an extra $250/month in your pocket.
This program is administered by the Counties, and your Mortgage Broker/Bank, but be aware that not all of them are familiar with it. Be prepared to educate them.

Mortgage Tax Deduction

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Here we are at the start of the annual self flagellation period otherwise know as Tax Preperation Time.
Given the amount of bad/wrong advice freely floating around on this topic you might find it helpfull to see what the rules really are as the I.R.S. sees it.
Check out this link: http://www.irs.gov/pub/irs-pdf/p936.pdf

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1st Time Buyer Tax Credit Form

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The IRS will be releasing a new version of Form 5405, the First-Time Homebuyer Credit Form, for homebuyers claiming the extended housing tax credit. Homebuyers eligible for the tax credit must use this new version if they:

1. Purchased their homes on or after November 7, 2009,

OR

2. Will claim the housing tax credit on their 2009 tax returns, regardless of when the property was purchased.

The new form was due to be published last December. The old form (currently the only one available on the IRS website) will not be accepted for claiming the tax credit under the extended rules.

NOTE: At this time the IRS requires that owners claiming this tax credit 0n their 2009 tax returns must file on paper. Be sure to check this beforehand if planning to file electronically. It may have changed by then.

Major Help From The IRS

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This is a great example of intelligent action by a government agency not know for it’s compassionate nature.

Also evidence of the benefits of being a Realtor and having the support of the California Association of Realtors.

IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With over one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.

As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don’t have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate or secondary to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS’s processing time for subordination or discharge requests has been about 30 days. The IRS is currently working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to the IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.

C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org are as follows