Mike Sackman

I took my business model/plan in a new direction last week and moved to Advanced Real Estate. This move will allow me to use marketing dollars the way I need and not depend on someone else to market their own agenda. I also changed my website to www.MikeSackman.com for branding purposes. It's hard to move companies, new signs, cards, people, office, and the list goes on. A real testament to your business is when you don't lose a single client during a move. I am happy to say that I have the best clients and they understand that sometimes you do what has to be done and they will be with you no matter what.

Consumer Watch: Tips for a tax windfall

Don’t let taxes take any more of a bite out of your wallet than absolutely necessary.

That means staying on top of recently extended tax deductions, as well as taking advantage of some previously enacted perks that come into play in 2010 tax filings. It might also mean getting some free help in preparing your taxes.

Some reminders from Army Lt. Col. Janet Fenton, deputy chief of legal assistance policy for the Army Judge Advocate General and a member of the Armed Forces Tax Council:

First-time homebuyer credit

Service members should pay close attention to this one, Fenton said.

• The Internal Revenue Service has been sending letters to people who took the initial $7,500 tax credit for first-time homebuyers in 2008, reminding them that they have to repay it starting with tax year 2010. But if you’re in the military and no longer living in that house because of permanent change-of-station orders to more than 50 miles away, you don’t have to repay it — even if you still own the house.

The IRS doesn’t specifically identify those who might fall into this category, so just because you get the letter doesn’t mean you have to repay. Still, Fenton stresses that you must file IRS Form 5405 to claim a waiver of the repayment. If you stay in the house, however, you are not eligible for the waiver.

• For those who received the $8,000 first-time homebuyer tax credit in 2009 or 2010, you don’t have to repay the tax credit unless you lived in the house for less than 36 months. Again, there’s a waiver for military members who move more than 50 miles away on PCS orders.

If you took this credit and moved within 36 months, file IRS Form 5405 to claim a waiver of the repayment, Fenton said.

Don’t just ignore it because you’re entitled to a waiver; the IRS may not know you are eligible.

“Eventually, the IRS will marry up the fact that there was a sale, or rental income” and ask questions, Fenton said.

You’ll probably have fewer hassles in the long run if you document it upfront. You can also get a waiver if you no longer live in the house because it was foreclosed, or condemned, or if there was a short sale.

A similar credit applies to longtime homeowners who buy a replacement residence, under the same general rules that apply to the first-time homebuyer credit in 2009 or 2010. A credit of up to $6,500 was extended to longtime homeowners who bought a replacement principal residence, if the homeowner lived in the same principal residence for any single five-year period during the eight years before the replacement home was purchased.

The credit was available to those who bought a home by April 30, 2010, and closed on it by Sept. 30, 2010. However, you might still be eligible for the homebuyer credit if you served outside the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010.

If you meet all the other criteria, you have until May 1, 2011, to enter into a contract to purchase a new home and claim the credit. You must be able to close on the house by July 1, 2011.

Generally, when claiming the first-time homebuyer credit, you must not have owned a home or had an interest in a home for the past three years.

Deductions of note

The tax bill signed into law late last year extended some otherwise-expired tax breaks that might be of interest to military families:

• Quite a few military spouses are educators, and many educators spend money out of their own pockets for books, supplies and other classroom equipment. The educator expense deduction allows for up to $250 of out-of-pocket expenses as an adjustment to your gross income. This applies to K-12 teachers, instructors, counselors, principals and aides. It doesn’t apply to expenses for home schooling.

• If you itemize deductions, you have the option of claiming either state and local income taxes or state and local general sales taxes. This might be an option for service members who are residents of a state that has no income tax.

If you have kept receipts of everything you bought during 2010, you can tally those for your returns. If that’s not an option, or you would rather do it the easy way, go to the IRS sales tax deduction calculator at http://apps.irs.gov/app/stdc.

Military spouse residency

Last year, some military spouses who asked for state tax relief under the 2009 Military Spouses Residency Relief Act were denied because they didn’t produce enough evidence to show connections to their claimed domicile state, Fenton said.

At that time, states were scrambling to sort out how they would handle the new federal law, which exempts the income of some military spouses from state taxes. The exemption applies to spouses who maintain domicile in one state but live in a different state because they moved there with their service members on military orders.

In many states, this was simply a matter of claiming it on the state tax return itself, without requiring proof that your domicile is in a different state. But others do require proof. Virginia, for example, has Form 763S, which includes a separate page of questions and document requests for military spouses.

“I hope this year, more states’ instructions will address it upfront,” Fenton said.

While it may seem easy to claim the exemption in some states, she said, there could be challenges down the road. States are working on a program that allows them to share information about people claiming MSRRA protection.

“So Virginia would know if someone is claiming Virginia residence and filing from Ohio,” she said. “Virginia wants to tax them.”

Bottom line: You may not have to pay taxes in the state where your service member is stationed, but you may still have tax obligations to your domicile state.

Spouses can’t simply pick a state with no income tax to be their domicile. You must have information and documents to support the claim.

“We encourage people filing under MSRRA to seek legal advice so that in future years they don’t get a challenge as to their eligibility,” Fenton said.

Free help with your taxes

• Start at your installation’s tax center. They’re often located separately from the legal assistance office, but that office will be able to tell you where it is.

Anyone with an ID card is eligible for assistance, within limits — if you own a business or lots of rental property, for example, you won’t be able to get your taxes done there.

These centers operate under the IRS Volunteer Income Tax Assistance program, which allows the military to do taxes for those with one rental property, because so many military people have not been able to sell their property when they move on PCS orders.

• Military OneSource also offers access to free online tax preparation. The Defense Department is paying to provide the H&R Block At Home Basic electronic tax filing program through the website.

To use it for free, those eligible must use the link on the Military OneSource website to create an account and access the customized version, officials say. Do not go to the public H&R Block website to create a user account.

• Military OneSource also offers access to tax consultants seven days a week from 7 a.m. to 11 p.m. Eastern time. Call the Military OneSource Tax Hotline at 800-730-3802.

7 Tips for Improving Your Credit From Houselogic.com. Here's how to clean up your credit so you get the least-expensive home loan possible. Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.
KNOW YOUR CREDIT SCORE! Credit scores range from 300 to 850, and the higher, the better. They're based on whether you've paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You'll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms. You're entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax(http://www.equifax.com), Experian(http://www.experian.com), and TransUnion(http://www.transunion.com). Access all three versions of your credit report at www.annualcreditreport.com(http://www.annualcreditreport.com). Review them to ensure the information is accurate.
CORRECT ERRORS ON YOUR CREDIT REPORT! If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there's an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.
PAY EVERY BILL ON TIME! You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You'll also save money because you'll keep the money you've been spending on late fees. Credit card or mortgage companies probably won't report minor late payments, those less than 30 days overdue, but you'll still have to pay late fees.
USE CREDIT CAREFULLY! Another good way to boost your credit score is to pay your credit card bills in full every month. If you can't do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.
TAKE CARE WITH THE LENGTH OF YOUR CREDIT! Credit rating agencies also consider the length of your credit history. If you've had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you're not using them.
DON'T USE ALL THE CREDIT YOU'RE OFFERED!! Credit scores are also based on how much credit you use compared with how much you're offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.
BE PATIENT! It can take time for your credit score to climb once you've begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you'll do to your credit score.

Other WEB RESOURCES; How FICO scores are calculated (http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx)
Answers to frequently asked credit report questions(https://www.annualcreditreport.com/cra/helpfaq)G.M. Filisko is an attorney and award-winning writer who keeps a close eye on her credit scores. A frequent contributor to many national publications including Bankrate.com, REALTOR Magazine,and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics. Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS (R).Copyright 2010. All rights reserved.

For those brave men and women that served overseas during 2009, you are still eligible for the first time home buyer tax incentive! That's right, you still can get $8000 for your home purchase. There are some stipulations for time served, but it is well worth investigating. Contact me for details and we can get you prequalified right away and be on the road to home ownership in as little as 45 days!

Have a great day and do one (or more) good deeds for someone else.

www.BeaufortHomesToday.com

Well it's been a while since I posted anything of any substance, it seems like all I have posted has been listings and just too busy to write how great I am.....Just saying of course. I guess I don't have anything to make up about how I almost tripped and fell off my boat, or OMG you should have seen.....Just saying of course.

It's Water Festival time in Beaufort and tonight is the talent show, it's always entertaining and it's amazing to see some of the children progress in their talents from year to year. Speaking of talent, I just completed another SHORT SALE class to help my clients through the maze of paperwork and endless waiting periods! It's a real pain, but if it were easy, anybody could do it.

The FORECLOSURES I have gotten recently were picked up by networking and hard work. There are some good deals to be had, but there are some definate "buyer beware" issues when deciding if a foreclosed property is for you. I can help guide you through that maze too.

Click here to get the schedule for Water Festival.