15 December 2009, 5:27 pm
With only a few weeks left in 2009 its time to take a good look at your year-end finances and make sure all your investments are in order. Gift tax exclusion, donations and contributions, and distribution requirements are important aspects to consider before the end of the year. As always, we recommend you meet with a professional financial advisor regarding your finances. Happy holidays to everyone and a happy New Years!
1. Evaluate the impact of a Roth IRA conversions – talk to your financial and tax advisors
2. The 2009 gift tax exclusion is $13,000 per person – each spouse can make a $13,000 gift to each of their children without any gift or estate tax consequence.
3. Maximize contributions to your 401(k) plans
4. A temporary tax law change waives the minimum distribution requirement for 2009, so if you do not need the funds in 2009, don’t take your minimum required distribution.
5. Up to $4,000 of higher education costs for yourself, your spouse or a dependent can be deducted from taxable income in 2009 if you meet income limits. Talk to your financial advisor.
6. You can claim first year bonus depreciation equal to 50% of the cost of most new equipment and software acquired and placed in service by 12/31/09. Take advantage of the temporary tax breaks for equipment and software purchases if you own a business. For tax years beginning in 2009, the maximum Section 179 deduction is $250,000 with reductions in the deduction for any qualifying property that exceeds $800,000.
3 December 2009, 10:02 am
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975. By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
“I will promise you, they count on that COLA,” said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. “To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal.” Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels. Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Continue reading ‘No Cost of Living Adjustment for Social Security Checks’ »
2 December 2009, 2:11 pm
Provided by Craig Curreri
When looking at the ups and downs of the real estate market over the last 50 years, a market peak in median price is higher than the previous market peak… therefore it is reasonable to believe that our next market peak will well exceed ‘05-06 prices. This is the time to buy a home or investment property at a fantastic discount and a bank owned home may be the way to go. Here is a brief overview of some things you might not know about buying a bank owned home.
Continue reading ‘So You Want to Buy a Bank Owned Home’ »
2 December 2009, 2:08 pm
Provided by Craig Curreri
A short sale occurs when the outstanding loans and/or obligations of the homeowner are greater than the current value of the property and the lender(s) accept(s) a discounted payoff.
Why would a lender be willing to do that? A little history will help your understanding. In the 1990s, there was a decline in property values and many homeowners who had bought with little or no down or refinanced pulling all their equity out, found themselves facing possible foreclosure. Some lenders discovered it was better to accept a short payoff as opposed to foreclosure. Foreclosures are notorious for running up expenses for repairs, sales commissions and taking plenty of time. Today, the average savings to a lender with a short sales is $14,000 per property when compared to a foreclosure.
Continue reading ‘SHORT SALE INFORMATION’ »
2 December 2009, 1:51 pm
Tips for first-time and repeat homebuyers to take advantage of credit
By Rick Laws
Sonoma County homebuyers and consumers across the country received an early holiday gift this month as Congress not only extended the first-time homebuyer tax credit, but expanded it to include many existing homeowners buying another property. This is truly exciting news that will not only benefit both buyers and sellers, but should help the fragile housing market recovery continue to gain momentum.
The new bill, signed into law by President Obama, creates a new incentive for current homeowners who have owned their property for at least five years to receive tax credits of up to $6,500 when they purchase a new home. At the same time, first-time homebuyers – and those who haven’t owned in the past three years – would still get tax credits of up to $8,000.
The current homebuyer tax credit has had a very real and positive impact on the housing market this year. Economists with the National Association of Realtors estimate that the tax credit has contributed approximately $22 billion to the general economy, with approximately two million first-time home buyers taking advantage of the program to get into a home.
There are a number of requirements for the new tax credit bill, which I’ll briefly cover in this column. But most importantly, both first-time homebuyers and move-up or repeat buyers need to get moving quickly. Both groups have just until next spring – April 30 to be exact – to sign a purchase agreement and they must close escrow by June 30. It’s unlikely that Congress will extend these credits again as the economy begins to recover.
Continue reading ‘Congress Extends – and Expands – Homebuyer Tax Credit’ »
Congress Extends – and Expands – Homebuyer Tax Credit
Tips for first-time and repeat homebuyers to take advantage of credit
By Rick Laws
Sonoma County homebuyers and consumers across the country received an early holiday gift this month as Congress not only extended the first-time homebuyer tax credit, but expanded it to include many existing homeowners buying another property. This is truly exciting news that will not only benefit both buyers and sellers, but should help the fragile housing market recovery continue to gain momentum.
The new bill, signed into law by President Obama, creates a new incentive for current homeowners who have owned their property for at least five years to receive tax credits of up to $6,500 when they purchase a new home. At the same time, first-time homebuyers – and those who haven’t owned in the past three years – would still get tax credits of up to $8,000.
The current homebuyer tax credit has had a very real and positive impact on the housing market this year. Economists with the National Association of Realtors estimate that the tax credit has contributed approximately $22 billion to the general economy, with approximately two million first-time home buyers taking advantage of the program to get into a home.
There are a number of requirements for the new tax credit bill, which I’ll briefly cover in this column. But most importantly, both first-time homebuyers and move-up or repeat buyers need to get moving quickly. Both groups have just until next spring – April 30 to be exact – to sign a purchase agreement and they must close escrow by June 30. It’s unlikely that Congress will extend these credits again as the economy begins to recover.
Continue reading ‘Congress Extends – and Expands – Homebuyer Tax Credit’ »