First Time Buyer’s Huge (Temporary) Tax Credit}

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First Time Buyer’s Huge (Temporary) Tax Credit

by

Christian Jacobsen

You lucky bunch! First time buyers can get a tax credit for as much as ten per cent of a first home purchase (but it must be less than a $7500 refund) . Yep, this is all part of the recently-passed and much publicized Housing and Economic Recovery Act of 2008 .

However, the fact that it is much publicized should mean that every young renting family should know about it – but according to a recent survey, at least 77% of renters do not.

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This lack of knowledge could be costly because the tax credit is only designed to be a temporary boost and will not be there for long. This concession by the Government offers quite a substantial saving.

Think about it – ten per cent on a home that costs $75,000 means that you will be allowed the maximum tax credit of $7,500! Free tax credits! Substantial free tax credits!

However, just a reminder: if you buy a home of $100,000 on which the ten per cent is calculated to be $10,000, you will still only be able to claim a tax credit of $7,500 as this is the maximum allowable.

Alternatively, if you purchase a home of $50,000 on which the ten per cent is calculated at $5,000, you will only qualify to claim the tax credit on the maximum 10% of the purchase price i.e. the $5,000.

New (brand new) housing sales are predicted to bottom out in the spring of 2009 and then they may start rising according to a comment made by Lawrence Yun, National Association of Realtors (NAR) Chief economist.

Now is an excellent time to get ‘your house in order’. Ensure that your credit rating is up to par, approach your bank or broker to arrange pre-approval to finance a mortgage for you, and check that you have enough savings to deposit a down payment as well as moving and closing costs.

Part of your pre-approval will point you to which price properties you will be able to consider. Of course, we always want the homes in the next price bracket up – but you can lose a home this way.

Be wise and be content with ‘starting’ on the bottom rung of the realty ladder; its not often that there is the chance to have a safety net put in place by the government!

Visit UtahPropertyFinder.com for an extensive list of available

Utah real estate

listings. Acquaint yourself with great investment opportunities in the surrounding Utah areas, including the

Davis County real estate

market.

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First Time Buyer’s Huge (Temporary) Tax Credit

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Learning About Tax Negotiation}

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Submitted by: Max Plata

If you are considering implementing tax negotiations, the first thing you must do is find a qualified tax specialist. You will not be able to effectively handle a tax negotiation on your own, and the help of a trained professional is imperative. A competent tax professional will be able to collect all of the pertinent information, complete all of the necessary paperwork, and handle all of the correspondence with the Internal Revenue Service representatives. There are numerous ways that a tax negotiation can work in your best interest.

There is a program entitled Offers in Compromise. This program allows you, through your hired tax professional, to make an offer to the Internal Revenue Service for an amount that is actually less than the amount of taxes that you owe. Sometimes, the Internal Revenue Service will accept this offer, and you will be able to become debt free from the Internal Revenue Service for much less than what you had originally owed.

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If you do choose to enter into tax negotiations with the Internal Revenue Service, and you have decided to make an Offer in Compromise, you need to understand that the Internal Revenue Service has three factors that they examine when deciding whether or not to accept such an offer. The Internal Revenue Service will look at many factors and determine if any of the following apply in your particular case; whether there is any doubt that you even actually owe the liability, whether you can afford to pay the liability if you truly owe it, and whether or not the settlement would promote effective tax administration.

Prior to 1992, the Internal Revenue Service was less likely than they are today to settle a tax liability for less than the actual owed amount. However, due to new procedures and regulations that have been put into place concerning the settlement of back taxes, the Internal Revenue Service is accepting more and more Offers in Compromise.

While tax negotiations are used to settle back tax situations, there are also other instances where tax negotiations are also used. Taxpayers sometimes use tax negotiations when the Internal Revenue Service says they owe a certain amount of tax and the taxpayer does not agree. Tax negotiations are also used to extend the amount of time, as well as lower the amount of interest that is to be paid for any back taxes that may be owed.

Tax negotiations should only be used in the most extreme situations. A tax negotiation is a tool, and should be used as such. Do not think that you can hire a tax professional every April and get out of any taxes that you may owe; the Internal Revenue Service will not take kindly to such an abuse of the system.

If tax negotiations may be the only hope for you, make sure that the tax professional you hire is licensed and has relevant experience handling your type of situation. They may just end up saving you a ton of money, as well as saving you from a lot of financial aggravation.

About the Author: Read more from Max Plata at:

moneydinero-magazine.com

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