Time to Claim Your 1st Time Homebuyer Tax Credit?

If you bought your first home between Jan 1 and Apr 30, 2010 you can claim the First-Time Homebuyer Credit for 10% of the cost of the house, up to a 
maximum of $8,000.

NOTE: Credits are better than Deductions.  Credits reduce your taxes dollar-for-dollar,  regardless of what tax bracket you are in.

Singles with income up to $125,000 get full credit -- partial credit if you made up to $145,000.

Married couples with income up to $225,000 get full credit – partial credit if they made up to $245,000.

What if You are Not a FIRST-time Homebuyer, but got a New Home?

Former or current homeowners who closed on a new home by Sep 30, 2010, 
and who lived in a principal residence for at least five of the past eight years 
before buying a new home, are eligible for a 10% tax credit, worth up to $6,500. 

Income-eligibility guidelines for the tax credit are the same as for first-time buyers.

Military members deployed on extended active duty outside the U.S. have until 
May 1, 2011, to enter into a contract, and until July 1, 2011 close the purchase.

HOW Do You Claim the Credit?

To claim your credit, you must file IRS Form 5405, “First-Time Homebuyer Credit 
and Repayment of the Credit,” and attach a copy of (a) your settlement statement, 
(b) a certificate of occupancy for a newly constructed home, or (c) proof of five 
consecutive years of ownership, such as mortgage-interest statements, property-
tax records or homeowners insurance.

Because of those documentation requirements, you cannot e-file your tax return. Print out Form 5405 and attach it to your Form 1040.  Attach the papers 
referenced above to your 2010 tax return, and mail it to the IRS by April 18, 2011.

    NOTES: 
      A. Download Form 5405 from the “Resource 
          Center” at www.HomeBusinessTaxSavings.com 
      B. Always mail tax returns as “Certified Mail” with
           “Return Receipt Requested.” 

BAD NEWS if You Took the ORIGINAL Credit back in 2008

Taxpayers who took advantage of the original  home buyer’s credit in 2008 didn’t get as good a good deal. That version of the homebuyers credit, to the surprise of many taxpayers who claimed the it, the $7,500 “credit” in reality was an interest-free
LOAN – a loan that must be repaid in installments. 

The first repayment is due with your 2010 tax return. If you claimed the full $7,500 credit in 2008, you now owe Uncle Sam $500/year for the next 15 years.  If you sell the house before paying off that loan, you’ll be required to repay the full balance at the time of sale.  Is the NEW Credit Really a CREDIT?  

For those who purchased their homes in 2009 or 2010, the credit really IS a credit.  It is not a disguised loan like 2008, and it does NOT have to be repaid.

Creating Tax-Smart Home-Business Owners,
Ron Ronald R. Mueller, MBA, Ph.D. – author of
“Home Business Tax Savings, Made Easy!”
available at www.HomeBusinessTaxSavings.com
 

Driving Tips For Better Fuel Economy

Use cruise control to maintain a steady speed on the open highway.

Know the correct starting procedure for your particular make, model and year of car. Don’t race a cold engine to warm it up.

Avoid extended idling to warm up the engine. Start driving right after the engine is started and warmed up, but avoid rapid acceleration.

Maintain steady speeds for the best fuel economy. A car uses extra fuel when it accelerates. “As a rule of thumb, you can assume that each 5 mph you drive over 60 mph is like paying an additional $0.20 per gallon for gas.”

Minimize the need to brake by anticipating traffic conditions. Be alert for merging traffic, slow-downs and red lights.

Travel at moderate speeds on the open road. Higher speeds require more gasoline use to overcome air resistance.

Use the air conditioner only when needed. Air conditioning dramatically reduces fuel economy.

Spark plugs should be in good condition. Spark plugs in lesser condition can reduce gas mileage up to 12%

Check the air filter twice a year. A dirty air filter increases fuel consumption and can cause poor performance. A dirty air filter can reduce can reduce gas mileage up to 20%.

Inflate tires according to the recommendation in the owner’s manual. Under-inflated tires are a safety hazard and can cut fuel economy by as much as 2 percent per pound of pressure below the recommended level.

Use the right octane level for your vehicle – Using premium gasoline in an engine designed to run on regular doesn't improve performance. Even some vehicles that call for higher octane fuels can run on regular unleaded, though with some loss of performance may occur. (Check your owner’s manual to be sure)

Be sure your gas cap is snug or tight. “Improperly seated gas caps allow 147 million gallons of fuel to vaporize every year in the U.S.”

Lighten up your load – Carry only the bare necessities. Don’t haul things around in your trunk that you don’t need. “For every extra 250 pounds your engine hauls, the car loses about one mile per gallon in fuel economy.” This will vary with the size of your vehicle (car, truck, van, SUV, etc)

Reduce drag – About half of your vehicle’s energy is expended overcoming air resistance. (The other half is expended in acceleration.) Reduce your car’s workload — remove anything that might cause drag (such as luggage racks, bike racks, ski racks, etc)

Take care of car-care “incidentals” that can affect fuel use. For example, a defective radiator thermostat can waste gas by extending the engine’s warm-up time or decreasing the engine’s operating temperature. A stuck brake caliper can create drag, which also wastes fuel.

And Last … But not least … Drive less!

Walk – Ride your bike – Take public transit – Carpool – Combine errands – It’s may be obvious, but is  easy to forget … the less you drive, the less you’ll spend on gas.

Do what works best for you!

Home-Based Business Owners - Now Qualify for More Tax Deductions

The average home business owner is overpaying his or her taxes by at least $100 a WEEK because of what they don't know. "Information is power, but lack of information is expensive!"

Home-based business owners now qualify for more tax deductions than any other category of taxpayer in America, bar none!

Running a part-time home-based business is the BIGGEST way – the ONLY way – the average person can have a major impact on slashing his/her taxes.