If you’re considering buying a home, now is the time! The $8,000 federal tax credit for new homebuyers—which was to expire November 30, 2009—has been extended through April 30, 2010. In addition, it’s been expanded to include a $6,500 tax credit for existing homeowners who buy a home as well.

Homebuyers Tax Credit for New Homeowners

To qualify for the $8,000 new homebuyer tax credit:

• You can’t have owned a home in the past three years.
• The house you purchase must cost $800,000 or less and serve as your primary residence.
• The purchase must be made between January 1, 2009 and April 30, 2010.
• You must live in the home for at least three years after purchase.
• Your income can’t exceed the maximum amount allowed.

For more information, check out our article on:
How to Claim the Federal Homebuyer Tax Credit for New Homeowners

Homebuyers Tax Credit for Existing Homeowners

To qualify for the $6,500 tax credit for current homeowners:

• You must have owned your present home for at least five years.
• The house you purchase must cost $800,000 or less and serve as your primary residence.
• The purchase must be made between November 7, 2009, and April 30, 2010.
• You must live in the home for at least three years after purchase.
• Your income can’t exceed the maximum amount allowed.

For more information, go to our article on:
How to Claim the Federal Homebuyer Tax Credit for Existing Homeowners

Related posts:

• How to Claim the Federal Homebuyer Tax Credit for Existing Homeowners
• How to Claim the Federal Homebuyer Tax Credit for New Homeowners
• Energy Efficiency Tax Credits for Homeowners

Homeowners who have lived in their present home for at least five years ,and meet certain other requirements, may be eligible for a refundable federal tax credit of up to $6,500 if they purchase a home between November 7, 2009, and April 30, 2010.

The homebuyer tax credit for homeowners is a provision of the Worker, Homeownership, and Business Assistance Act of 2009. It can be applied to the purchase of both existing and new homes, including single-family homes, condominiums, manufactured homes, and even houseboats. The tax credit is refundable, meaning that a refund check will be issued to the homeowner if no federal income taxes are owed.

Eligibility Requirements for Tax Credit

In order to be eligible for the federal homebuyers tax credit for homeowners, the following conditions must be met:

• The home must be located in the United States.



• It must serve as the taxpayer’s principal residence (vacation homes and rental property are not eligible).
• The homeowner must have lived in the home for the last five years.
• The purchase price on the home must be $800,000 or less.
• The purchase agreement must be signed between November 7, 2009 and April 30, 2010, with the sale completed by June 30, 2010.
• The home must serve as the primary residence for at least three years after purchase.
• The home cannot be bought from a spouse or close relative (parent, grandparent, child, or grandchild).
• The tax credit is limited to a maximum of 10% of the purchase price for homes costing under $65,000.
• The homeowner’s income must be less than the maximum amount allowed.

Income Requirements for Tax Credit

In order to be eligible for the federal homebuyer tax credit for homeowners, the following income requirements must be met:

• Full Tax Credit: Taxpayers filing individually with a modified adjusted gross income (MAGI) of $125,000 a year or less, or married couples filing jointly with a MAGI of under $225,000, are eligible for the full $6,500 tax credit.
• Partial Tax Credit: Taxpayers filing individually with a MAGI of less than $145,000, and married couples filing jointly with under $245,000 in income, may be eligible for a partial tax credit.
• No Tax Credit: Taxpayers filing individually with a MAGI of over $145,000, and married couples filing jointly making over $245,000, are not eligible for the tax credit.

How to Claim the Tax Credit

If you qualify for the tax credit:

• Complete IRS Form 5405.
• Enter the amount determined on line 67 of your 2009 or 2010 return.

Further Information

• Federal Housing Tax Credit (National Association of Homebuilders)
• Extended Home Buyer Tax Credit (National Association of Realtors)
• How to Claim the Federal Tax Credit for New Homeowners
• Energy Efficiency Tax Credits for Homeowners

Related posts:

• How to Claim the Federal Homebuyer Tax Credit for New Homeowners
• Homebuyers Federal Tax Credit Extended and Expanded
• Energy Efficiency Tax Credits for Homeowners

A home inventory is a comprehensive report which includes detailed descriptions and photos of the personal property in and around your home. While considered a key component in documenting insurance claims, a home inventory is also valuable for estate and financial planning.

Importance of a Home Inventory

If you were to step outside your home, could you list all the items you own? Even if you could list everything, would you be able to provide detailed information—including the purchase date, cost, model, and serial number—on the contents of your home?

A home inventory ensures that homeowners are sufficiently prepared, in terms of their insurance coverage, to deal with potential losses. A detailed list of all the items destroyed, damaged, or stolen is required for an insurance claim. Proper documentation ensures a faster and smoother claims process, as well as maximizing your insurance reimbursement.

In fact, you must provide documented proof of ownership to receive a settlement covering the full extent of the loss. According to the National Association of Public Insurance Adjusters, most policyholders do not realize that the burden of proof rests with them.

Benefits of a Home Inventory

Obtaining a comprehensive home inventory:

• Ensures you have the necessary amount of insurance coverage.
• Identifies items—such as jewelry, coins, antiques, artwork, and silverware—that have limited coverage. The decision can then be made to purchase additional coverage (known as a “rider”) so the items will be insured for their full value.
• Allows an evaluation on whether to insure your property and contents at “replacement cost” or “actual cash value.” Replacement cost is the amount it takes to replace or repair your home and possessions with materials of similar quality. Actual cash value is a lower amount that consists of replacement cost less depreciation.
• Results in a higher appraisal for your home, since it documents and provides proof of home improvement projects which add value to your home.
• Verifies the condition of your assets before moving or placing them in storage in case of loss or damage.

Home Inventory in Estate and Financial Planning

A home inventory also acts as a valuable resource and supplement for wills, trusts, or other legal documents:

• The home improvement report provides a detailed breakdown of personal property—including beneficiary designation and contact information for each item—to ensure that your assets are distributed according to your wishes.
• Important documents such as wills, life insurance policies, deeds, and stock certificates can be scanned into the inventory report, along with the location of the documents.
• The probate process is simplified, faster, and less stressful since all the information needed is clearly defined.
• Because the home inventory is a complete list of your personal assets, it can be used for loan applications or determining your net worth.
• A home inventory provides a valuable resource for estate sales and auctions.

Information Included in an Inventory Report

The information gathered in a home inventory report includes:

• Description
• Model
• Serial number
• Cost
• Purchase date
• Manufacturer
• Photos and video footage
• Heir designation
• Estimated or appraised replacement value
• Scans of receipts and important documents

Compiling Your Own Home Inventory

While you can create your own home inventory, it is often put off or partially completed since it requires a substantial investment in time. It also requires the proper equipment (scanner, camcorder, and camera) and software to create a detailed and comprehensive inventory which will be accepted by the insurance company.

Hiring an Inventory Specialist

An alternative to conducting your own home inventory is to hire a reputable company to compile it for you. Advantages include:

• Credibility: Using an inventory specialist lends credibility to your inventory for insurance companies, financial planners, and law enforcement.
• Time: The inventory can be taken and compiled within one week.
• Expense: Hiring an inventory service is affordable and is money well spent when damage, theft, or death occurs.
• Information: Complete and detailed information for each item—including photos and scans of receipts—is compiled to assist in claims or probate. Video footage is also taken to support ownership of property.
• Security: Data from your inventory is encrypted and stored at a back-up facility—ensuring security should your copies be lost or destroyed.

How to Choose an Inventory Specialist

When hiring an inventory specialist, be sure they have and provide the following:

• Performance bond.
• Insurance coverage against accidental damage to personal property.
• Signed guarantee certificate that the client’s information will be kept strictly confidential, and the steps that will be taken to ensure this occurs.
• Statement of work defining what is to be inventoried and how the information will be delivered.
• The means used to secure the data is clearly defined.
• Renewal policy that details the cost of updating your inventory.
• Review a sample inventory portfolio so you can see what you will be receiving.
• Ask any questions that you may have concerning what will be provided.

Keeping a Home Inventory Secure

Once your home inventory is complete, store the information in a safe location away from your house such as a safe deposit box, at your insurance agent or lawyer, or by uploading it to a secure data backup provider.

For more information on creating a home inventory, visit our website at jlksystems.com, or email janet@jlksystems.com.

First-time homeowners, which includes anyone who hasn’t owned a home in the last three years, may be eligible for a refundable federal tax credit of up to $8,000 if they purchase a home between January 1, 2009 and April 30, 2010.

The first-time homebuyer tax credit was a provision of the American Recovery and Reinvestment Act (ARRA) of 2009 and extended by the Worker, Homeownership, and Business Assistance Act of 2009. It applies to the purchase of existing or new homes and can be taken even if the homeowner does not owe any federal taxes (in which case a refund check will be sent to the taxpayer).

Tax Credit Eligibility Requirements

In order to be eligible for the federal first-time homebuyers tax credit, the following conditions must be met:

• The home must be located in the United States.
• It must serve as the taxpayer’s principal residence (vacation homes and rental property are not eligible).
• The purchase price on the home must be $800,000 or less.
• The purchase agreement must be signed between January 1, 2009 and April 30, 2010, and the sale completed by June 30, 2010.
• The home must serve as the primary residence for at least three years after the purchase was completed.
• It cannot have been purchased from a spouse or close relative (parent, grandparent, child, or grandchild).
• For homes worth less than $80,000, the tax credit is limited to a maximum of 10% of the purchase price.
• The homeowner’s income must be less than the maximum amount allowed.

Tax Credit Income Requirements

In order to be eligible for the federal first-time homebuyers tax credit, the following income limits must be met:

Claiming the Tax Credit

The tax credit can be taken either by:

• Amending your 2008 federal tax return.
• Claiming the credit on your 2009 federal tax return.

To claim the credit, complete IRS Form 5405 and enter the amount determined on line 69 of your 2008 federal 1040 income tax return, or line 67 of your 2009 or 2010 return.

Further Information

• Federal Housing Tax Credit (National Association of Homebuilders)
• First-Time Homebuyer Credit (IRS)
• First-Time Homebuyer Credit Questions & Answers (IRS)
• How to Claim the Federal Homebuyer Tax Credit for Existing Homeowners
• Energy Efficiency Tax Credits for Homeowners

Related posts:

• How to Claim the Federal Homebuyer Tax Credit for Existing Homeowners
• Homebuyers Federal Tax Credit Extended and Expanded
• Energy Efficiency Tax Credits for Homeowners

The recession is over.

I have decided that I’ve heard enough positive news about the stock market, housing starts, banks recovering, etc. that I’m convinced that we are on our way back from a tough period in America.

It was scary for a short time as we watched and listened to the media tell us what could happen to our economy. But we Americans listen, respond and are willing to do whatever we need to do to get things back on track.

We are doing it now and I’m very happy for our country, my family and my company. Times like this make us appreciate what we have and where we live. I’m proud and ready for great times ahead . . . for everyone.

Happy 4th of July.

Can you give me some advice on how to hire a decent handyman? -Zeb

When hiring someone to work on your home, start by asking how many years they’ve been in business, how they price their work, and if they provide a free estimate. It’s also important to be sure they carry liability insurance. If not, you may be responsible for any medical expenses—or more—if they are injured on the job. Get a complete description in writing of all the work that will be done and exactly how much it will cost. Remember, some jobs are best left to professionals who specialize in the field.

Who Can Qualify?

Taxpayers who make energy efficiency improvements to their home during 2009 and 2010 using approved products can apply for a credit on their 2009 or 2010 federal income tax returns. A few of the improvements also qualify for a tax credit when installed on primary, rental, or second homes through 2016.

While the energy efficiency improvement tax credit can reduce the amount you owe on your federal income tax to zero, you won’t receive a larger refund than the total amount of income tax you paid for the year. In other words, if you will already receive a full refund of your federal income tax, you will not benefit from the energy efficiency improvement tax credit.

What Home Improvements Qualify?

In order for an improvement to be eligible for a tax credit, the product used must meet certain government established criteria for energy efficiency and come with a Manufacturer Certification Statement indicating that it qualified.

There are two basic categories of tax credits, each of which allow you to deduct 30% of the cost of the improvement, depending on the type of energy saving products you install:

• Products that have a maximum tax credit limit of $1,500.
• Products with no maximum limit.

$1,500 Tax Credit

The following energy saving home improvements are eligible for a tax credit of 30% of the cost of the improvement, with a maximum limit of $1,500 for both years combined. So to receive all of the tax credit, you would need to spend a total of $5,000. Improvements must be completed and put into service between January 1, 2009 and December 31, 2010 to qualify. You may lump several different energy saving improvements together in the tax credit. Products must be installed on an existing home that serves as the taxpayer’s primary residence. Qualified improvements include:

• Insulation
• Windows and storm windows
• Exterior doors and storm doors
• Skylights
• Energy efficient HVAC systems and furnaces
• Garage doors
• Heat reflective roofing
• Energy efficient hot water heaters
• Biomass stoves (wood and pellet)

30% Unlimited Tax Credit

The following improvements are eligible for a 30% tax credit with no maximum limit. The work must be completed between January 1, 2009 and December 31, 2016. Unlike the $1,500 credit, improvements can be to a primary residence, rental home, or second home. Also, both new construction and existing homes are eligible. Qualified improvements include:

• Geothermal heat pumps
• Solar hot water heaters
• Photovoltaic power systems
• Residential wind energy systems

Product Requirements

To best way to be sure that the products you install meet the requirements for the energy efficiency tax credit is to obtain a Manufacturer Certification Statement stating that they qualify. Here are some general guidelines for each type of product.

Insulation

To qualify for a tax credit, insulation must:

• Be primarily used for insulation purposes.
• Be expected to last at least 5 years or carry a 2-year warrenty.
• Meet 2009 International Energy Conservation Code (IECC) guidelines.

NOTE: Only material costs qualify for the tax credit on insulation. Installation costs are not covered.

Windows, Doors, and Skylights

To qualify for a tax credit, the NFRC approved label on the product must state that it has:

• U-Factor of 0.30 or less.
• Solar Heat Gain Coefficient (SHGC) of 0.30 or less.

Deciding whether storm windows and storm doors qualify is more complicated, since their energy efficiency ratings must be combined with the IECC rating and climate zone of the window or door they cover.

NOTE: Only material costs qualify for the tax credit on windows, storm windows, doors, storm doors, and skylights. Installation costs are not covered.

Heating and Air Conditioning Systems

To qualify for a tax credit, HVAC systems must meet the following minimum energy efficiency rating or higher for Energy Efficiency Ratio (EER), Seasonal Energy Efficiency Ratio (SEER), Heating Seasonal Performance Factor (HSPF), and Annual Fuel Utilization Efficiency (AFUE):

• Split Air Conditioner: EER 13 & SEER 16.
• Package Air Conditioner: EER 12 & SEER 14.
• Split Heat Pump: EER 12.5, SEER 15, & HSPF 8.5.
• Package Heat Pump: EER 12, SEER 14, & HSPF 8.
• Gas or Propane Furnace: AFUE 95.
• Oil Furnace: AFUE 90.
• Gas, Propane, or Oil Hot Water Boiler: AFUE 90.
• Geothermal Heat Pump: Must meet Energy Star requirements.
• Biomass Stove: Thermal efficiency rating of 75%.

NOTE: Both installation and material costs qualify for the tax credit on heating and cooling systems.

Garage Doors

To qualify for a tax credit, a garage door must:

• Be installed on an insulated garage.
• Have a U-Factor of 0.30 or less.
• Solar Heat Gain Coefficient (SHGC) of 0.30 or less.

NOTE: Only material costs qualify for the tax credit on garage doors. Installation costs are not covered.

Heat Reflective Roofing

In order to qualify for a tax credit, roofing must:

• Meet government Energy Star requirements for heat reflective roofing.
• Be expected to last at least 5 years or carry a 2-year warrenty.

NOTE: Only material costs qualify for a tax credit on roofing. Installation costs are not covered.

Hot Water Heaters

To qualify for a tax credit, hot water heaters must:

• Gas, Oil, or Propane Water Heater: All Energy Star approved tankless models. No storage tank models qualify.
• Electric Heat Pump Water Heater: Energy Star approved models.
• Solar Water Heater: Energy Star approved models that are not used for swimming pools or hot tubs.

NOTE: Both installation and material costs qualify for the tax credit on hot water heaters.

Solar and Wind Power Systems

In order to qualify for a tax credit, solar and wind powers systems must:

• Provide electricity for the residence.
• Meet required fire and electrical code requirements.

NOTE: Both installation and material costs qualify for the tax credit on solar and wind power systems.

Products that Do Not Qualify

The following items are not covered under the tax credit:

• Ceiling fans
• Clothes washers and dryers
• Dishwashers
• Electric tankless water heaters
• Programmable thermostats
• Refrigerators
• Room air conditioners

For more information on whether a product qualifies for the energy efficiency tax credit, contact the manufacturer. For detailed tax information, contact the Internal Revenue Service at 1-800-829-1040 or your tax accountant.

Further Information

• Federal Tax Credits for Energy Efficiency (Energy Star)
• Consumer Energy Tax Incentives (Dept. of Energy)
• American Recovery and Reinvestment Act (EERE)

Related posts:

• On the Road for Energy Efficiency
• How to Claim the Federal Homebuyer Tax Credit for Existing Homeowners
• (702) Four Step Energy Makeover: How to Make Your Home More Energy Efficient

Related posts:

• Budget Conscious Home Improvement Projects