An Extention To The Home Buyer Tax Credit? Not Yet

June 24, 2010 By Leave a Comment

Tax credit was not extended -- yetAs it’s June 30, 2010 closing deadline approaches, the federal home buyer tax credit is back in the news.

Unfortunately, the headlines are misleading.

Contrary to what you may have read (or heard), the federal home buyer tax credit has not been extended past June 30, 2010. At least not yet. And here’s why there’s confusion.

Look at these headlines from earlier this week:

  • Senate Extends Date On Home-Buying Tax Credit (Philadelphia Inquirer)
  • U.S. Senate Approves Extension Of Home Buyer Tax Credit (NASDAQ)
  • Senate Approves Home Tax Credit Extension (Reuters)

Now, nothing above is factually incorrect, but each neglects a key piece of the country’s law-making process — it takes more than the Senate to pass a law. For a bill to become a law, it must pass the Senate and the House of Representatives and then it must be ratified by the President.

To date, we’ve only cleared just one of those 3 steps.

This means that the federal home buyer tax credit has not been formally extended. As of now, it’s still in discussion.  Ultimately, though, if the extension does pass, it’s expected to extend the closing date deadline for Mesa home buyers beyond the original June 30, 2010 date into September 2010.

Homeowners must still have been in contract as of April 30, 2010 to claim up to $8,000 in federal tax credits.

Filed Under: Tax Tips Tagged With: ,

Claim Your Federal Tax Credits (Even If You Have Already Filed)

April 8, 2010 By Leave a Comment

Taxes are due April 15 and if you’re among the millions of Americans who wait until the last week to file, here’s a video interview that could help you reduce your federal tax liability.

Originally broadcast by NBC’s The Today Show, the 4-minute piece reviews various tax credits and deductions, plus some recent tax law changes.  A few of the topics covered include:

  • Tax filers receiving larger “personal exemptions” in 2009 versus 2008
  • Unemployment income recipients being required pay taxes beyond the first $2,400 received
  • The “first time” home buyer credit being extended to non-first time home buyers for up to $6,500

The interview also talks about how taking a parent, child or other family member into your home may change your tax filing status and reduce your tax liability.

Even if you’ve filed your taxes already, watch the video above. You may find that you missed a potential deduction. If that’s the case, consider filing an amended return with the IRS to recapture the credits you left on the table.  Most times, the benefits of re-filing will outweigh the costs of doing it.

Be sure to talk with your tax professional for personal tax advice.

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February Sees Expected Increase In Pending Home Sales

April 6, 2010 By Leave a Comment

Pending Home Sales (August 2008-Fed 2010)As expected, the Pending Home Sales shot higher in February, boosted by the federal home buyer tax credit’s April 30 deadline.

Versus the month prior, February’s index rose 8 percent but remains well off the highs set last October.

For today’s home buyers and seller, the Pending Home Sales Index is an important measurement. This is because a “pending home” is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April’s Existing Home Sales will be higher, too.

If you’re a Tempe home buyer today, no doubt you’ve noticed the extra market activity.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; Days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It’s a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There’s no reason to expect that won’t happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.

Filed Under: Pending Home Sales Tagged With: ,