First-Time Homebuyer’s Credit Fraud

Written by on July 31, 2009 in Home Buying, Tax Planning - No Comments

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.

http://www.irs.gov/newsroom/article/0,,id=211399,00.html?portlet=6

FreeCreditReport.com is NOT FREE!

Written by on July 28, 2009 in Credit Report, Financial Humor - No Comments

Here are a few videos from the Federal Trade Commission  that are parodies of freecreditreport.com.  Remember freecreditreport.com is not free!

The website that is free is www.annualcreditreport.com

Enjoy!

Five Fundamentals of Fiscal Fitness

Written by on July 23, 2009 in Security - No Comments

As written in Bert Whitehead’s book Why Smart People Do Stupid Things with Money, here are five fundamentals of fiscal fitness we should all follow:

1.  Save a minimum of 10% of your gross income.

2.  Have adequate cash (10% of income) and emergency reserves (20% of your income or 20% of mortgage balance).

3.  Buy house 2-2 1/2 times income.

4.  Fund available retirement plans as much as possible.

5.  Pay off all consumer and credit debt.

How would you rate yourself on these “fundamentals?”  If you ever want to become “financiallly independent,” then you need to be doing these “fundamentals.”

To Refinance or Not

Written by on July 21, 2009 in Home Buying, Security - No Comments

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?

Read more…

Tax Tips for Newly Married Couples

Written by on July 15, 2009 in Tax Planning - No Comments

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.

Interesting Books to Read

Written by on July 7, 2009 in Investing, Military - No Comments

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.

Penny CandyThe 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.

Commanding Heights

Written by on July 7, 2009 in Economics - No Comments

Check this video out if you would like to learn more about current economic conditions by studying how we got to where we are today.  Very informative!