Relocating? Deducting Moving Expenses on your taxes may make your relocation a little less stressful. Here are the IRS rules to see if you qualify:
If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your moving expenses. To qualify for the moving expense deduction, you must satisfy two tests. 
Under the first test, the “distance test”, your new job must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job must be at least 50 miles from your old home.
The second test is the “time test”. If you are an employee, you must work full-time for at least 39 weeks during the first 12 months right after you arrive in the general area of your new job. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new work location. There are exceptions to the time test in case of death, disability and involuntary separation, among other things.
If you are a member of the armed forces and your move was due to a permanent change of station, you do not have to satisfy the “distance or time tests”.
Moving expenses are figured on Form 3903 (PDF) and deducted as an adjustment to income on Form 1040 (PDF). You cannot deduct any moving expenses that were reimbursed by your employer.
For more information on deductible moving expenses, please refer to Publication 521, Moving Expenses.
See also: Tampa Bay Relocation Guide
Need help relocating to the Tampa Bay Area? Contact me to find your perfect home! Rae Catanese, PA-Licensed Realtor-Tampa, St. Pete, Clearwater. 813 784 7744 or email
If you purchased a home and are paying PMI (Private Mortgage Insurance) you may be able to deduct the mortgage insurance payments on your taxes!
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Question 1: I bought my main home in 2008 using a mortgage and I pay monthly premiums for mortgage insurance. Can I deduct these payments?
Answer: In general, if you itemize deductions, you may deduct premiums paid for mortgage insurance provided by the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Rural Housing Service (Rural Housing), or private mortgage insurers in connection with a mortgage for the purchase of your main home.
The amount you may deduct is limited if your adjusted gross income is more than $100,000 ($50,000 if married filing separately). No deduction is allowed if your adjusted gross income is more than $109,000 ($54,500 if married filing separately)
Visit the IRS website for more information and forms |
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WASHINGTON, D.C. — – Homeowners stuck with tainted Chinese drywall could be eligible for big tax breaks.
The Internal Revenue Service said Thursday it would consider granting a tax deduction for homeowners who can prove they have suffered “sudden, unusual and unexpected” damage because of the building material.
In a market where many houses are already depreciating in value or even facing foreclosure, houses that have defective drywall are being rendered valueless, exacerbating the current housing crisis. Houses with defective drywall may even depress the property value of adjacent homes. One estimate is that the cost of remediation might be around $100,000 per home.
Toxic drywall
As more and more people from across Florida and elsewhere are reporting problems in their homes built with imported drywall, I’ve proposed legislation aimed at initiating a recall and imposing an immediate ban on tainted building products from China. You can find out more about that legislation here, but in the meantime, I wanted to give you some resources so you can find out if you have a problem with the drywall in your house, and if so what you can do.
How do I know if I have “Chinese drywall”?
- There is presence of sulfur-like or other unusual odors
- Confirmed presence of Chinese manufactured drywall in the home
- Observed copper corrosion, indicated by black, sooty coating of un-insulated copper pipe leading to the air handling unit present in the garage or mechanical closet of home
- Documented failure of air conditioner evaporator coil (located inside the air handling unit)
- Confirmation by an outside expert or professional for the presence of premature copper corrosion on un-insulated copper wires and/or air conditioner evaporator coils (inside the air handling unit)
Florida Department of Health
The Florida Department of Health has set up a website specifically for people who are wondering if they may have the hazardous imported drywall in their house. It has a section for frequently asked questions and a list of local, state, and federal agencies where you can file a consumer complaint.
The federal Consumer Product Safety Commission (CPSC) has put up a website with information about the status of their investigation of hazardous drywall, including a section to answer many of the questions you may have. To report a complaint of toxic drywall to the CPSC, you can fill out a form on their website.
“If the facts and circumstances show that a taxpayer’s home has had a sudden, unusual and unexpected damage, and that this damage was caused by Chinese drywall, and that all of the other requirements of the deduction are met, the taxpayer is entitled to a casualty loss deduction,” IRS spokesman Bruce Friedland told Scripps Howard News Service.
Consumer Product Safety Commission
The Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010). The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the $6,500 tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit. [click to continue…]
Home Owner Move-Up/Repeat Home Buyer Tax Credit FAQ
The Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010). Who is eligible to claim the $6,500 tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
What is the definition of a move-up or repeat home buyer?
The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is “modified adjusted gross income”?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and the first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $6,500 are available for some taxpayers whose MAGI exceeds the phaseout limits.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $235,000. The applicable phaseout to qualify for the tax credit is $225,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $6,500 by 0.5. The result is $3,250.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $138,000. The buyer’s income exceeds $125,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $6,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,275.
Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances
See also: Other Important information about the tax credit for first time home buyers
The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
If you are looking to use the first time home buyer tax credit, here is the information on changes and the extension.
I’ve also posted links to a spreadsheet that provides more details on changes to the tax credit. Please take the time to read over the Frequently Asked Questions document as well.
Please let me know if you are looking to purchase a home in the Tampa Bay Area and would like more information! realtyrae@yahoo.com
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
- Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
- Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Who Qualifies for the Extended Credit?
- First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.
- Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
How is a Buyer’s Credit Amount Determined?
Each home buyer’s tax credit is determined by tow additional factors:
- The price of the home.
- The buyer’s income.
Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Buyer Income
Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Tax Credit Changes (PDF: 455K)
Home Buyer Tax Credit FAQ (PDF: 596K)
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Here’s an update on the home buyer tax credit which is hopefully going to be EXTENDED until June 2010. This will make a big impact on Tampa Real Estate, since many buyer’s have now run out of time to purchase a home by Dec. 1st. Glad to see they are working on extending it!
WASHINGTON — Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6% in September, and some industry representatives blamed uncertainty about the tax credit.
Senators agreed to extend the existing $8,000 tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to home buyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.
Please contact me with any questions: 813 784 7744-Rae Catanese, Realtor
There is no official news that the tax credit will be extended past the Dec 1st deadline. Realtors are campaigning to ask Congress to extend the credit for one year.
As a Realtor, I can assure you that the $8,000 first-time homebuyer tax credit has definitely been a success. Homebuyer interest and housing sales increased almost as soon as the ink was dry on the tax credit legislation. Today’s lower prices and interest rates appeal to consumers, but it’s been the tax credit that has attracted people to open houses and to homeownership.
That progress could grind to a halt sooner than you think. Congress must act NOW to extend the credit through 2010. Otherwise, uncertainty will return and the market might again be frozen — possibly as soon as October.
A homebuyer is eligible for the tax credit only if the home is “purchased” before December 1, 2009. That means that buyers have to find a house, complete a contract, satisfy any contingencies, secure financing and go to closing by November 30. Accomplishing those tasks by November 30 will become more difficult with every passing day. In today’s market, it generally takes between 45 and 60 days to go from contract to closing.
The market has improved, but it has not yet fully corrected itself. The credit needs to be extended for an additional period of time and expanded in order to build upon the progress that’s been made. Uncertainty about the future of the credit will dampen consumer demand. The best way to assure continued housing activity is to extend and expand the credit and to do that NOW.
Questions? email me: realtyrae@yahoo.com
Rae Catanese
Decision Time Draws Near for First Time Buyer’s Credit
While the economy continues to show signs of improvement and many housing markets are beginning to heat up, scores of would-be buyers are still waiting on the sidelines for further positive housing trends. But for first-time buyers, time is running short on the federal government’s $8,000 tax credit.
Though the official expiration date of the credit is December 1, in reality on-the-fence buyers will need to make a decision one way or the other fairly soon. The reason: in order to qualify for the credit, the home purchase must close by December 1st. Merely having loan approval, an accepted offer or a signed contract won’t be enough to qualify for the Housing and Economic Recovery Act.
Decision-Making Timeline – While each transaction is unique, closing a real estate deal is no speedy matter. On average, closing takes place 45 to 60 days after the date that the contract is signed. In order to meet the December 1st deadline, this would mean having a signing date in late September or early October. Those who consider the tax credit an important incentive but are still unsure about entering the market will need to make a decision one way or another before many more summer days pass.
To have any chance at finding a home and having an offer accepted by early October, buyers will want to wade into the home buying process right away. The immediate steps include making a final list of desired home attributes, scouting favorite neighborhoods and areas, starting the mortgage pre-approval process and beginning the home search process online.
Potential for Delays - Buying a home is a complicated process, and it is not unusual for purchases involving first-time buyers to take slightly longer than those involving experienced buyers. Some of the delays that first-time buyers may face over the coming months:
Competition with Other Buyers
While home may be selling at a lower rate than in years past, in many areas changes in inventory have created extremely competitive buying environments. Foreclosures or other homes with greatly lowered asking prices are particularly sought after, and in many cases investors are very active in the marketplace.
Disclosures & Contingencies
The seller is obligated to disclose any material facts about the property, including any property defects or any lawsuits regarding claim to ownership on the property. Disclosures can stall negotiations and delay the contract signing depending on their nature and severity. Contingencies (written clauses in the sales contract that give protection to both the buyer and the seller of a home) can also result in some delay in negotiation, particularly if the contingency requires the seller to make specific repairs.
Appraisal: The lender will arrange for appraisal of the property, which will include a thorough inspection of the home’s interior and exterior. The appraiser’s report will describe the physical characteristics of the property and comparable property values will be used to determine the value of the property. If the appraisal of the home’s value is lower than the agreed upon sales price, the buyer’s chance of loan approval can be in jeopardy. In addition, recently added rules for appraisers have been causing some delays based upon anecdotal evidence.
Loan Approval
While interest rates remain advantageous for buyers, lenders are being much more fastidious during the approval process. Obtaining pre-approval can help prevent many delays.
The Holiday Season
Buyers who submit an offer in mid-fall may likely run into another roadblock to a pre-December 1st closing date: the approaching holiday season. Closing a real estate sale requires the work and attention of a number of professionals; from real estate agents to attorneys to bankers. Like many Americans, it is not uncommon for individuals in these fields to use up vacation time in the last few weeks of November. Securing a closing date during Thanksgiving week may be something approaching miraculous.
Additional Delays for Short Sales and Foreclosures
Buyers who make an offer on a short sale property or bank-owned foreclosure may find that it takes a significantly longer time to receive a reply than expected. Overall, buying these types of properties is a longer process than buying homes listed on the market by individual owners.
Search all homes for sale in the Tampa Bay area.
Looking for a Real Estate Agent who can help you with the home buying process? Give me a call! Rae Catanese, PA 813 784 7744
Friday the St. Petersburg Times stated that Governor Christ signed a bill to allow for the First Time Homebuyer Credit to be used as down payment and I am getting numerous emails regarding the details so I wanted to take a moment and update everyone.
FHA announced today that it will allow the First Time Homebuyer Tax Credit of 8,000 to be used for down payment ONLY ABOVE the FHA required down payment of 3.5% of sales price or the credit can be used towards closing costs. This means that the Buyer would still need a 3.5% down payment from their own funds or from a gift. Today’s announcement does NOT allow the Buyer to use the First Time Homebuyer Tax Credit as the 3.5%. This credit will assist our Buyers with payment for closing costs or the additional deposit which could help the Buyer to qualify for a lower loan amount. There are still details to work out in the mortgage industry before any lender can underwrite and close on this type of transaction.
At this time there is NO program that would allow for the First Time Homebuyer Tax Credit to be used for down payment on a conventional loan. We will keep you updated. Although the Governor signed a bill we do not have any specifics nor information on what State program will be used to work with the tax credit as down payment.
For most of our market area the maximum FHA loan amount is $292,500. If you want to take advantage of this option and have 3.5% saved or can get a gift from an approved source and want to write a contract, at this time my suggestion would be to write the contract for a closing of 90 days. We do not have all the procedures finalized by FHA inorder to close the loan.
Remember, a first time home buyer is someone who has not owned a home in 3 years, not just a first timer!
