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Home Buyer Tax Credit & The IRS… What You Need To Know

admin — Thu, 18 Mar 2010 21:02:39 +0000

The Internal Revenue Service has recently released the new form that eligible homebuyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns began in mid-February. The IRS also announced earlier this year what the new documentation requirements to deter fraud related to the first-time homebuyer credit will look like.

The new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit.

With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.

The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February after it completes the updating and testing of systems to meet the law’s new requirements. The updates allow the IRS to put in place critical systemic checks to deter fraud related to the homebuyer credit.

Some of these early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks.

In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:

A copy of the settlement statement showing all parties’ names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

In addition, the new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. The IRS has stepped up compliance checks involving the homebuyer credit, and it encouraged homebuyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:

Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
Property tax records or
Homeowner’s insurance records.

The IRS also reminded homebuyers that the new documentation requirements mean that taxpayers claiming the credit cannot file electronically and must file paper returns. Taxpayers can still use IRS Free File to prepare their returns, but the returns must be printed out and sent to the IRS, along with all required documentation.

Normally, it takes about four to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. For those homebuyers filing early, the IRS expects the first refunds based on the homebuyer credit will be issued toward the end of March.

The IRS encourages taxpayers to use direct deposit to speed their refund. In addition, taxpayers can use Where’s My Refund? on IRS.gov to track the status of their refund.

More details on claiming the credit can be found in the instructions to Form 5405, as well as on the First-Time Homebuyer Credit page on IRS.gov. If you have questions regarding the tax credit, income taxes or what forms you should file, please contact a qualified CPA or the IRS.

New Construction: 5 Reasons To Use an Architect

admin — Sun, 19 Apr 2009 20:21:49 +0000

If you’re planning a large remodel, a licensed expert may pay off.

5 reasons architects are worth the money when redoing your home

If you’re considering a large-scale, once-in-a-lifetime remodel, the expert help of a licensed architect may help you achieve the home of your dreams.

By Popular Mechanics

If you’re like most homeowners, you probably dream of one day completing a major home-remodeling project. And I’m not talking about retiling a tub here. This is the once-in-a-lifetime renovation — the kind that dramatically changes how you live, energizes the entire household and makes all the neighbors really jealous.

Perhaps your dream is to build a two-story addition with a family room below and a master bedroom and bath above. Or maybe you’ve always wanted to expand the kitchen and install French doors leading to a wraparound deck. Regardless of what your dream entails, all major remodeling projects can benefit from the expert design help of an experienced, licensed architect.

I know what you’re thinking: Architects are way too expensive and only necessary when building multimillion-dollar homes — and the current economic roller coaster isn’t helping any. The truth is, architects are well worth the extra cost on large remodeling jobs because with thoughtful evaluation and design, they can meet — and often exceed — your expectations. In fact, depending on the size or complexity of the remodeling, calling in an architect might be the only way to get the project off the ground, and to ensure your dream comes true. Here’s why you should consider taking the plunge if you’re gung-ho about a large-scale remodel of your house.

1. To see the big picture
An architect has the training and skill to produce a detailed design based on your particular needs and desires — a design that’s sensitive to the architecture of your existing home and scaled to the proper proportions. However, what truly makes an architect valuable is the ability to develop and refine a vision of the completed project that you can see and understand. And architects are experts at seeing not only the big picture, but also the hundreds of tiny steps between concept and completion.

After the initial consultation, and once you and the architect have defined the scope, features, purpose and functionality of the project, the architect will develop a set of preliminary drawings, sometimes called schematics. These drawings are just the first of many that you should expect to see.

"It’s important for the architect to spell out in advance what each set of drawings will include," says Richard Hayes, architect and managing director of the American Institute of Architects. Don’t be concerned if the preliminary drawings seem lacking, because each subsequent set will contain more and more detail, including written specifications. In fact, Hayes recommends asking the architect to show you a final set of drawings from a recently completed job, just to give you an idea of what to expect at the end of the design phase.

But before you settle on a candidate, carefully consider the firm’s past designs and gauge whether its vision for your house meshes with your own. If you want to incorporate salvaged stained-glass windows and antique brass doorknobs, for instance, don’t choose an architect whose past work features floating drywall over recessed fluorescent lights.

2. To handle the paperwork
When most of us think of an architect-designed project, we envision the aesthetics of the building: its size, shape and finished surfaces. But behind the pretty face are the bones of the building. It’s the architect’s job to design the project to satisfy building codes and meet specific structural demands. And striking that balance between aesthetic beauty and structural safety is no easy feat — it requires a vast knowledge of various building materials and construction techniques. Hiring a pro makes sure your renovation plays by the rules.

"A good architect knows the building code and alternative ways to solving structural problems," explains Marc Olivieri, a Connecticut construction manager. "Architects also prepare most of the documentation necessary to acquire all the various building permits." And those services can ultimately save you time and money.

3. To hire the muscle
No one understands the design of your project better than the architect, which is why he or she is the perfect person to coordinate the various construction professionals before the work starts in earnest. For example, an architect will meet with structural engineers or HVAC mechanics prior to construction to discuss the design, answer questions and ensure everyone knows their job.

The architects’ plans make all the difference in translating your dreams to the details a contractor needs. If a problem should arise, which often happens, the plans will act as a record of what should have been done, and the architect will find a solution without compromising the design, your needs or your wallet.

4. To oversee the job
Once the design phase is completed, you can decide how involved the architect is in the actual day-to-day construction of the project — if at all. You can hire an architect just to design the project and create all the necessary drawings, and that’s it. He or she then has no further involvement. However, for an additional fee, some architects will manage the project by hiring subcontractors, establishing the work schedule and confirming that all work is done properly and according to the final plan.

Another common practice is called contract administration, or "CA" for short. "When you sign a CA," Hayes explains, "the architect will check in on the construction from time to time to answer questions and ascertain if work is adhering to the intent of the design."

A third level of supervision is available through design-build firms. These one-stop shops will design and build your project, providing supervision throughout every phase of construction, including hiring subcontractors. This option also saves you the trouble of negotiating and signing two contracts — one with an architect and another with the contractor. But be aware that some design-build firms employ home designers, not certified architects.

It’s also important that you be involved during the construction process, even if it’s just to consult with the architect from time to time. That way, you’ll be able to express your concerns as the project takes shape. "Working with an architect is a bit of a balancing act," Olivieri says. "You want to make sure your needs and desires are satisfied, but without surrendering all control to the architect when changes or refinements to the design are necessary."

5. To go green
More and more architects are starting to design buildings that are environmentally sensitive to both the planet and the homeowner. Considering sustainability in concept and construction will ensure your investment lasts a long time, limits its consumption and saves you money through efficient design.

The options available vary widely depending on the experience of the architectural firm and the circumstances of your project. Even if you’re not plunging into a photovoltaic array or a backyard wind farm, smart choices can make significant, smaller gains. Consider using recycled and nontoxic materials, solar or passive water heaters, efficient insulation and a trustworthy thermostat. Because many of these measures involve whole-house systems, it’s critical to plan for them.

For more information about green architecture, visit the American Institute of Architects’ Sustainability Resource Center and the U.S. Green Building Council.

By Joseph Truini, Popular Mechanics

This story was submitted by one of our readers and originally appeared at: Popular Mechanics

Get this and other real estate news from www.MyDesMoinesrealty.com

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admin — Mon, 02 Mar 2009 02:39:00 +0000

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admin — Thu, 12 Feb 2009 21:46:26 +0000