Before filing your taxes this year, there are some tax changes you need to know about that could affect what you owe or get back
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According to a report released by Trulia.com, 21 percent of the homes for sale as of January 1, 2010 have experienced at least one price cut. This makes the second consecutive month that price reduction levels have decreased and the lowest level since Trulia started tracking price reductions in April 2009.
The average discount for price-reduced homes continues to hold at 11 percent off of the original listing price. This was also the second straight month where inventory levels have dropped for single family homes and condos across the United States.
The South has the lowest overall level of price reductions, with 20 percent of current listings experiencing at least one price cut, while the Northeast saw the biggest decrease in price reductions compared to the previous month — 12 percent. (Regions according to the U.S. Census Bureau)
Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with the average discount rising to 15 percent for the first time since Trulia started tracking in April 2009.
Additionally, luxury homes represent less than two percent of all current listings on Trulia, but are responsible for 24 percent of the $21.2 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10 percent.
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Buyers who purchased a home after November 6th were unable to claim their tax refund for first time homebuyers because the Internal Revenue Service had yet to release a new form and instructions for doing so. However, the new form is available from the IRS website now, and you can file for your $8,000 credit now.
The bad news is, you cannot e-file your taxes if you want the cash, and you can expect long delays.
Previously, first-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.
But on Nov. 6 the rules changed. That's when Congress extended — and expanded — the tax credit, which was originally scheduled to expire on Nov. 30.
Now, the deadline is April 30, by when all contracts must be signed. (Closings must happen by June 30.) Plus, existing homeowners looking to trade up (or down) can qualify for a $6,500 refund.
And these new buyers can no longer file electronically. They have to mail in paper forms, including the new 5405, whether they are amending their 2008 taxes or claiming it on the 2009 taxes that are being filed this spring.
Buyers must now file documentation with their taxes — including proof of residency, a signed mortgage statement and drivers license — which the e-file system is not equipped to handle.
All this is due to the people who were scamming the system when no proof was required. The IRS points out that taxpayers can still use the electronic forms available on its Web site or consumer sites, they just have to print them out, attach the proof and mail everything in, and expect delays of up to four months before getting your refund.
In an effort to save a few dollars in this down economy, many would-be-sellers today are turning to computer generated reports to establish the value of their property, rather than paying for a full appraisal. These sites use data that is collated from various resources to come up with estimates of what a property is worth.
Although a professional appraiser is more expensive, they are highly trained to accurately determine the value of many different types of properties, as well as account for many variables the computerized reports don't take into consideration, like surrounding neighborhoods, economic development in the area, and the quality of the school system, just to name a few.
Many lenders don't even require an in-depth inspection or interior inspection of a home, which begs the question: How can a realistic property valuation be arrived at without an on-site inspection? The answer is, it can't.
To obtain state licensing or certification, appraisers must undergo a stringent course of training through an accredited educational facility. In addition, some states require appraisers to complete an apprenticeship with a more seasoned professional before they can operate independently. The best appraisers will consider every aspect of the property, including square footage, room count, types of rooms, condition of property, lot size, neighborhood trends and comparable properties in the area that recently sold, as well as similar properties that are currently on the market.
Locating a qualified appraiser in your area is not a difficult task. Banks and lenders in your neighborhood can often refer you to reputable appraisers.
