Posts Tagged ‘Taxation’

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.

California Buyers Tax Credit – Good or Bad?

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Speaking as a Realtor I should welcome the new California tax credit for certain homebuyers. Instead I condemn it as nothing more than a subsidy for lenders, the building industry and the brokers/agents (including me) handling their transactions.

California is a virtually bankrupt State with the 3rd worst educational system in the Country.

To be allocating $200 million to such a program, while simultaneously imposing huge cuts on education, seems to me the height of irresponsibility.

In practice this program will chiefly benefit people who would be buying anyway, and steer them toward new construction. I don’t see this as anything Realtors should be cheering about.

Banks and Builders however are welcoming it with huge sighs of relief.

Just my opinion.

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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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