This morning I received an e-mail from the IRS and it explained how they are starting to prosecute those who are committing first-time homebuyer’s credit fraud. The main point of the article was to remind taxpayers and preparers that you can’t claim the credit until after your house has closed. With this being the case, do not count on using the $8,000 tax credit for closing costs! Also, a first-time homebuyer for credit purposes is someone who has not owned a home in the last three years. If the tax payer is married, this rule applies to their spouse as well.
I have spoken to a few local realtors and mortgage brokers in my area and they are saying that closings are taking longer then they did last year at this time. Their warning is: if you qualify for the first-time home buyer’s credit and you plan on buying a house to receive the tax credit for 2009, you need to start the process NOW! Remember, to qualify, you have to have closed on your house by December 1st, 2009.
I was recently asked if I could comment on the feasibility of refinancing. I thought my response to that question would make for a good blog entry. Keep in mind my answer will just barely approach the subject and that it is important that you have someone look over the exact facts of your situation to evaluate if you should refinance or not. I strongly recommend working with a fee-only financial advisor before you meet with a mortgage broker. A fee-only advisor can be your advocate and help you to better understand if refinancing is right for your individual needs. A mortgage broker will only benefit from your business if they actually “sell” you the refinance. Why not get an objective opinion before you move on to meeting with the commissioned salesperson?
Today I received an informational e-mail from the IRS regarding tips for newly married couples. I thought it could be useful to some so I am going to summarize the two most important tax tips a newly married couple can use and then I will also share with you an important tax planning rule with the third tip.
1. Notify the social security administration of any name changes. This is especially important when it comes to filing your tax return in the spring. I had a client experience a delay last year in their tax return being processed because his wife did not update her last name with the SSA.
2. Make sure you check your tax withholding at your job so that you are not having too much or too little tax withheld. My rule of thumb is if you are +/- $500 of your expected tax liability then you are withholding a proper amount. The IRS has a helpful tool to use to calculate your anticipated tax liability at http://www.irs.gov/individuals/article/0,,id=96196,00.html .
3. Remember, if you are legally married as of December 31st at 11:59pm, then you only have two filing options, i.e. married filing a joint return or married filing a separate return. Keep in mind that in most cases (but not all) it is advantageous to file a joint reurn, if at all possible.
Lately I have been able to read a couple of books I thought I would share with you. These books include: Whatever happened to Penny Candy and Lone Survivor.
The first one, Whatever Happened to Penny Candy, is a quick read. The main topic throughout the book is the value of money and the effects of inflation. This book is written for middle and high school students so it is easy to understand. It really challenges the notion that inflation has more to do with the devaluing of our money instead of the more common notion of inflation being a rise in prices. The author argues that prices rise in relation to the value of money being devalued. If you really want to have your “eyes opened” and see the potential side effects of the massive spending we have going on in Washington right now you should read this book.
The second book I just finished is Lone Survivor. This book will really help you to understand the sacrifice of those serving in the military. This book is about 4 Navy Seals who get ambushed in Afghanistan by the Taliban along the Pakistan border. There is definitely good and evil in the world and the author has no qualms with saying it. He has stared evil in the eyes and lost four of his fellow Navy Seals because of it. This book will inspire you to thank those you know who serve in the military and it will help you to realize the freedom we share.
Kevin Jacobs, doing business as Step By Step Financial, LLC, is registered with the State of Oklahoma as a Registered Investment Advisor.
Step By Step Financial, LLC is a fee-only planning firm that provides comprehensive financial planning. This World Wide Web site does not provide investment, legal, accounting, situation specific advice, nor does it constitute an offer to provide such advice to any individual or entity in any state or other jurisdiction.
IRS Circular 230 compliance statement - unless expressly stated otherwise, any tax advice contained in this communication (including any attachments), is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or other matter addressed herein.
Privacy Statement & Legal Terms
Privacy Statement: Step By Step Financial, LLC, is concerned about your right to privacy. When you visit our website, the following data is collected:
The type of browser used
Geographical region the connection is originating from
Date and time of the connection
Pages visited during the connection
Date and time the connection was severed
This information is used solely to determine traffic patterns on the site. No personal information is collected at any time. Any personal correspondence to us that originates from this site via one of the email/subscribe links will be for internal use only and treated confidentially. We do not disclose personal information to any third-party without consent.