In the hopes of sustaining the real estate market's recent momentum, Uncle Sam has made more than two-thirds of current homeowners and nearly all first-time buyers eligible for thousands of dollars in tax perks when they purchase a house. President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law Friday, a day after the House of Representatives approved it by a 403-to-12 vote. The legislation includes language that significantly expands the popular first-time home buyer tax credit that was enacted in February. The development represents a big victory for the real estate and home building industries, which had to overcome concerns about the measure's costs while rallying support for its enactment. Here are five things you need to know about the development: [See First-Time Home Buyer Tax Credit Gets Obama Nod.] 1. For first-time home buyers: While the value of the credit remains as high as $8,000, the new law pushes back the deadline by which qualified first-time home buyers must make their transaction in order to claim it. (The legislation defines "first-time home buyers" as anyone who has not owned a principal residence in the three years prior to making the purchase.) Under the previous law that went into effect in February, buyers needed to close the transaction by Nov. 30. However, under the terms of the new law, home buyers must have a signed sales contract before May 1, 2010, but they have until the end of June to actually close the transaction. At the same time, the new law raises the annual income limits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples. The changes make nearly all first-time home buyers eligible for the credit, according to Goldman Sachs economist Alec Phillips. [Also see New Home Buyer Tax Credit: 7 Things You Need to Know.] 2. For current home owners: In addition, the new law makes most current homeowners eligible for a tax credit of up to $6,500 when they purchase their next primary residence. Under the terms of the legislation, current homeowners must have lived in their home for five consecutive years over the previous eight to be eligible. Qualified home buyers can obtain the credit on homes purchased between Nov. 7 and the end of April 2010. That means they need a signed sales contract on a home before May 1, 2010, but they have until the end of June to close the sale. The income limits for current homeowners are the same as those for first-time home buyers. About 70 percent of current homeowners are now eligible for the credit, according to Phillips. 3. Additional specs: The credit can only be claimed on primary residences purchased for less than $800,000. And as long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back. Furthermore, buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return. 4. Fighting fraud: The first-time home buyer tax credit became the subject of controversy in late October, when a Treasury Department inspector general told Congress that his office had identified hundreds of millions of dollars in questionable claims. The suspicious cases included taxpayers who claimed the first-time home buyer credit even though it appeared that they had owned residential property within the previous three years, as well as taxpayers who claimed the credit before actually purchasing the home. Hundreds of taxpayers younger than 18 years old—and at least one who was just four—also claimed the credit. And by expanding the initiative to include more than two-thirds of current homeowners, the potential for incorrect or fraudulent claims has only increased. To that end, the new law includes measures designed to limit its abuse. Anyone claiming the credit must now provide documentation—such as a copy of their HUD-1 Settlement Statement—to prove that the sale has closed. In addition, it also bans anyone younger than 18 years old from claiming the credit. 5. Price tag: First-time home buyer tax credits have cost the government around $10 billion in lost revenue through Aug. 22. The expanded credit program is projected to cost an additional $10.8 billion or so. Amid mounting concern over massive government spending—the federal budget deficit for fiscal year 2009 was $1.4 trillion—some economists have questioned whether additional home buyer subsidies are really the best use of taxpayer cash. The financial blog Calculated Risk, for example, estimates that the February first-time home buyer tax credit cost the government roughly $43,000 for every additional home sale it generated. Economists at Goldman Sachs have estimated that the February first-time home buyer tax credit would trigger an additional 200,000 sales by the end of the year. Mark Zandi, the chief economist at Moody's Economy.com, puts the figure closer to 400,000 by the end of November. Nevertheless, Goldman's Phillips argues that the new law won't have a game-changing impact on the housing market. That's because only 14 percent of first-time home buyers who had been ineligible for the credit can now participate thanks to the higher income limits. Meanwhile, the credit's expansion to current homeowners may increase sales activity. "However, these sales would not result in a reduction of the inventory on the market, since every buyer taking advantage of the move-up credit would necessarily be a seller (of their existing principal residence)," Phillips said in a report. Nevertheless, the expanded credit could boost home prices by about 1 percent, Phillips says.
US Senators eye extending home credit to end of April
By Andy Sullivan and Corbett B. Daly WASHINGTON, Oct 28 (Reuters) - The U.S. Senate's top Democrat and top Republican each voiced support on Wednesday for extending and expanding a soon-to-expire tax credit aimed at boosting the fragile housing market, though a vote on the measure could be delayed until next week. Key senators agreed to extend the $8,000 first-time homebuyer tax credit, which expires at the end of next month, through April of next year, sources familiar with the matter told Reuters. A spokeswoman for Senate Majority Leader Harry Reid said the deal would also allow for those who have been in their home for at least five years to receive a $6,500 tax credit if they purchase a new primary residence. She also said the credit would be available for individuals making up to $125,000 a year and couples earning up to $250,000 per year, raised from $75,000 and $150,000, respectively, in the current tax credit. "There has been general agreement by a significant number of senators, Democrats and Republicans, to get this done," Reid, a Nevada Democrat, said on the Senate floor. Nevada has been hard-hit by the bursting of the housing bubble. The chamber's top Republican, Senator Mitch McConnell, also said most senators support the measure. "I certainly share his view," McConnell said. TIMING OF A VOTE UNCERTAIN While extending the credit enjoys widespread support, its fate is caught up in a spat between Reid and McConnell over unrelated issues. Reid wants to attach a bill to extend the homebuyer credit as an amendment to legislation to lengthen insurance benefits for unemployed workers. The Reid spokeswoman said the unemployment insurance measure could get pushed to next week as lawmakers try to resolve differences over unrelated issues, which would delay consideration of the homebuyer credit extension. "We will get this extension passed," she said. A report last week showed sales of previously owned homes hit a two-year high in September as buyers rushed to take advantage of the credit before its expiration date. However, a report on Wednesday showed new home sales, a much smaller segment of the market, tumbled unexpectedly last month. Separately, a report from the Mortgage Bankers Association on Wednesday that demand for mortgages has fallen for the past three weeks as buyers move to the sidelines. A buyer would have to close on the purchase of a home before Nov. 30 to take advantage of the current tax credit. (Additional reporting by Lisa Lambert; Editing by Leslie Adler, Gary Hill)
The following is a Ward 3 Update from Teri Anulewicz:
Jonquil Festival – The Fall Jonquil Festival is this weekend, October 24 and 25. Be sure to head to the Village Green for food and fun! For more information on this and other upcoming events, visit www.SmyrnaCity.com.
I hope that everyone is enjoying this beautiful fall weather. I would like to pass on information on several items of interest in Ward 3 and in Smyrna:
Railroad Silent Crossing – We have a date! Installation for the silent crossing bars is set to begin on November 14 at the Spring Street and Hawthorne Avenue CSA Railroad crossings.
Belmont Hills – Demolition of the Belmont Hills shopping center is nearly complete. The next phase of demolition will include clearing all the debris from the shopping center and fencing the perimeter of the property. Landscaping will also be installed around the perimeter of the property. Unfortunately, vertical construction will be delayed, primarily due to the current economic climate. Halpern has assured the City that the property will be landscaped and maintained and the fence will have a mesh overlay and the landscaping should greatly enhance the appearance of the property.
Jonquil Village – Construction of Jonquil Village remains delayed while the developers obtain the funding necessary to continue the project. The City is working continuously with the developers to ensure that the property is properly maintained. Throughout the summer, the City used larvaecide to inhibit mosquito growth in the drainage pond; the developers should be installing the permanent aeration system shortly.
I will let you know as soon as the situation changes on either of these properties. In the meantime, please let me know if you have any questions.
Nixle / Facebook / Twitter – Residents of Smyrna may now take advantage of Nixle, a service that alerts them to safety and traffic notices as well as community events via web, e-mail, and text message (cell phone). Nixle is completely free, simple, and trusted (residents must register themselves and must be registered to receive messages). Learn more at www.nixle.com and encourage your neighbors to register and to share news of this service with friends and neighbors. A link to the Nixle website is on the front page of the City of Smyrna website, www.SmyrnaCity.com.
For even more social networking with the City of Smyrna, follow our Twitter feed – we’re SmyrnaNews.
Five Points Traffic Light – As those of you who frequently drive through the Five Points intersection, the lights are not cycling properly. The lines were damaged during the repaving project on Matthews Street. Public Works is aware that the lights are not as efficient as they should be and will repair the sensors once the paving project is complete.
Census – The Census is set to begin in 2010. It is critical that everyone in Smyrna be counted. Did you know that the distribution of SPLOST funds to municipalities in Cobb County is determined based on population, so in order for your sales tax dollars to return to Smyrna, everyone must be counted.
Community Development Update – Building permit activity appears to have bottomed out and is slowly on the way back. For the third consecutive month, the percentage of permit activity, at all levels of measurement (number of permits, value of permits, cost of permits and number of plan reviews) on a year-to-year comparison has steadily increased. As an example of this growing increase, eight townhomes and 5 single family detached permits have been issued over the last 21 days.
Storm Debris Pickup – Public Works will offer free pick-up of storm debris from those residents who suffered flood damage for the next 30 days.
Library Update – The Library has added a new online database for remote use by the public. Glassdoor is a comprehensive career resource with information on thousands of companies including salaries, job details at specific companies, and actual interview questions with hiring process details.
Additionally, the Cobb Mobile Career Center will be at the Library every Wednesday in November, offering computer access and job search assistance free of charge.
Jonquil Bulbs Available – KSB announced bulbs are available at the Recycling Center for $12 per bag of 50 or $20 for two bags. They will also be available at the Backyard Feed & Seed, Smyrna Museum, Wolfe Center, and at the Fall Jonquil Festival.
TheSmyrnaTeam.com, your Smyrna Real Estate Source! Eddie Hudson and Tracy Gaudiano, Realtors (770) 874-6262
BUYERS SHOULD TAKE FIVE STEPS TO FINANCIAL FITNESS
By John Adams:
Whether you are buying a house or not, you are affected by your credit score. More so than ever before, your credit score determines the rate you will pay for your home mortgage loan. In Atlanta, lender Peter Berk of Bank of America says most borrowers seeking thirty year financing will pay one-eighth percent less on their interest rate if their credit score tops 720.
While that seems a small difference, it adds up to more than four thousand dollars over the life of the loan. In addition, if your score is below 620, it may be difficult to obtain home financing at any rate.To help boost your credit health, follow these five tips:
* Pay your monthly bills on a timely basis.I know this sounds very basic, but paying "on time" is vitally important to credit grantors. They believe how you have paid in the past is a strong indicator of how you will pay in the future.Your payment history makes up about 35 percent of your credit score, and it comes directly from information on your credit report, so pay your bills early and check to make sure none are late - ever.
* Keep accounts open to build longevity.Closing one account and opening another looks to creditors like you are churning your credit, and it alarms them. Instead, keep unused accounts open by using them at least occasionally. The length of your credit history accounts for about 15 percent of your score, so strive for long-term relationships with quality merchants and institutions.
* Don't overuse your revolving credit.In fact, it's best to keep your credit card balances below 25 percent of your limit at all times, even if you pay it off in full every month.Carrying a balance above 50 percent of your limit indicates to creditors that you may be living off your credit card during a difficult financial time. Keep your utilization percentage low and ask for increased limits if you need to. This factor makes up 30 percent of your credit score.
* Take it easy on new credit requests.Each application you make generates a credit inquiry, and too many inquiries signals the bureau that your circumstances may have taken a turn for the worse. This factor makes up about 10 percent of your score.
* Try to keep a healthy mix of credit types.A mix of active credit cards, retail accounts, installment loans, and mortgages would indicate a prudent use of credit in your financial life. Overuse in any one area could indicate a credit dependence. This area accounts for the final 10 percent of your score.
Remember that your credit score only looks at information contained in your credit report. That's why it is so important to make sure your information is accurate. For more information, visit myfico.com.
Deciding What to Do With Your 401(K) Plan When You Change Jobs
Deciding What to Do with Your 401(k) Plan When You Change Jobs
When you change jobs, you need to decide what to do with the money in your 401(k) plan. Should you leave it where it is, or take it with you? Should you roll the money over into an IRA or into your new employer's retirement plan? As you consider your options, keep in mind that one of the greatest advantages of a 401(k) plan is that it allows you to save for retirement on a tax-deferred basis. When changing jobs, it's essential to consider the continued tax-deferral of these retirement funds, and, if possible, to avoid current taxes and penalties that can eat into the amount of money you've saved. Take the money and run When you leave your current employer, you can withdraw your 401(k) funds in a lump sum. To do this, simply instruct your 401(k) plan administrator to cut you a check. Then you're free to do whatever you please with those funds. You can use them to meet expenses (e.g., medical bills, college tuition), put them toward a large purchase (e.g., a home or car), or invest them elsewhere. While cashing out is certainly tempting, it's almost never a good idea. Taking a lump sum distribution from your 401(k) can significantly reduce your retirement savings, and is generally not advisable unless you urgently need money and have no other alternatives. Not only will you miss out on the continued tax-deferral of your 401(k) funds, but you'll also face an immediate tax bite. First, you'll have to pay federal (and possibly state) income tax on the money you withdraw (except for the amount of any after-tax contributions you've made). If the amount is large enough, you could even be pushed into a higher tax bracket for the year. If you're under age 59½, you'll generally have to pay a 10 percent premature distribution penalty tax in addition to regular income tax, unless you qualify for an exception. (For instance, you're generally exempt from this penalty if you're 55 or older when you leave your job.) And, because your employer is also required to withhold 20 percent of your distribution for federal taxes, the amount of cash you get may be significantly less than you expect. Note: Because lump-sum distributions from 401(k) plans involve complex tax issues, especially for individuals born before 1936, consult a tax professional for more information. Note: If your 401(k) plan allows Roth contributions, qualified distributions of your Roth contributions and earnings will be free from federal income tax. However, no distributions will be qualified until 2011 at the earliest. If you receive a nonqualified distribution from a Roth 401(k) account only the earnings (not your original Roth contributions) will be subject to income tax and potential early distribution penalties. Leave the funds where they are One option when you change jobs is simply to leave the funds in your old employer's 401(k) plan where they will continue to grow tax deferred. However, you may not always have this opportunity. If your vested 401(k) balance is $5,000 or less, your employer can require you to take your money out of the plan when you leave the company. (Your vested 401(k) balance consists of anything you've contributed to the plan, as well as any employer contributions you have the right to receive.) Leaving your money in your old employer's 401(k) plan may be a good idea if you're happy with the investment alternatives offered or you need time to explore other options. You may also want to leave the funds where they are temporarily if your new employer offers a 401(k) plan but requires new employees to work for the company for a certain length of time before allowing them to participate. When the waiting period is up, you can have the plan administrator of your old employer's 401(k) transfer your funds to your new employer's 401(k) (assuming the new plan accepts rollover contributions). Transfer the funds directly to your new employer's retirement plan or to an IRA (a direct rollover) Just as you can always withdraw the funds from your 401(k) when you leave your job, you can always roll over your 401(k) funds to your new employer's retirement plan if the plan allows it. You can also roll over your funds to a traditional IRA. You can either transfer the funds to a traditional IRA that you already have, or open a new IRA to receive the funds. There's no dollar limit on how much 401(k) money you can transfer to an IRA. You can also make a direct rollover of your 401(k) money to a Roth IRA if you qualify (the taxable portion of your distribution from the 401(k) plan will be included in your income at the time of the rollover). If you've made Roth contributions to your 401(k) plan you can only roll those funds over into another Roth 401(k) plan or Roth 403(b) plan (if your new employer's plan accepts rollovers) or to a Roth IRA. Generally, the best way to roll over funds is to have your 401(k) plan directly transfer your funds to your new employer's retirement plan or to an IRA you've established. A direct rollover is simply a transfer of assets from the trustee or custodian of one retirement savings plan to the trustee or custodian of another (a "trustee-to-trustee transfer"). It's a seamless process that allows your retirement savings to remain tax deferred without interruption. Once you fill out the necessary paperwork, your 401(k) funds move directly to your new employer's retirement plan or to your IRA; the money never passes through your hands. And, if you directly roll over your 401(k) funds following federal rollover rules, no federal income tax will be withheld. Note: In some cases, your old plan may mail you a check made payable to the trustee or custodian of your employer-sponsored retirement plan or IRA. If that happens, don't be concerned. This is still considered to be a direct rollover. Bring or mail the check to the institution acting as trustee or custodian of your retirement plan or IRA. Have the distribution check made out to you, then deposit the funds in your new employer's retirement plan or in an IRA (an indirect rollover) You can also roll over funds to an IRA or another employer-sponsored retirement plan (if that plan accepts rollover contributions) by having your 401(k) distribution check made out to you and depositing the funds to your new retirement savings vehicle yourself within 60 days. This is sometimes referred to as an indirect rollover. However, think twice before choosing this option. Because you effectively have use of this money until you redeposit it, your 401(k) plan is required to withhold 20 percent for federal income taxes on the taxable portion of your distribution (you get credit for this withholding when you file your federal income tax return for the year). Unless you make up this 20 percent with out-of-pocket funds when you make your rollover deposit, the 20 percent withheld will be considered a taxable distribution, subject to regular income tax and generally a 10 percent premature distribution penalty (if you're under age 59½). If you do choose to receive the funds through an indirect rollover, don't put off redepositing the funds. If you don't make your rollover deposit within 60 days, the entire amount will be considered a taxable distribution. Which option is appropriate? Assuming that your new employer offers a retirement plan that will accept rollover contributions, is it better to roll over your traditional 401(k) funds to the new plan or to a traditional IRA? Each retirement savings vehicle has advantages and disadvantages. Here are some points to consider: A traditional IRA can offer almost unlimited investment options; a 401(k) plan limits you to the investment options offered by the plan A traditional IRA can be converted to a Roth IRA if you qualify A 401(k) may offer a higher level of protection from creditors A 401(k) may allow you to borrow against the value of your account, depending on plan rules A 401(k) offers more flexibility if you want to contribute to the plan in the future Finally, no matter which option you choose, you may want to discuss your particular situation with a tax professional (as well as your plan administrator) before deciding what to do with the funds in your 401(k).
Taste of Smyrna, as the new “Festival of Delectable” is back better than ever! Sample all Smyrna restaurants have to offer! Great music, too! Sat., Sept., 19th from 11:00 a.m. – 8:00 p.m. in beautiful downtown Smyrna.
Admission is FREE and samples can be purchased from .50 up to $4.00. We are expecting over 30 restaurants including Atkins Park, Dave and Buster’s, Taco Mac, Marlow’s Tavern and more to tempt your taste buds and fill your senses. There will be acoustic music from Scott Thompson entertaining all day on the lawn at the Veteran’s Memorial and continuous entertainment on the Main Stage in front of the library. The Main Stage entertainment will culminate with a concert at 7:00 p.m. by the one and only Francisco Vidal Band. Francisco Vidal Band has been rocking Atlanta since the early 90's and hasn't stopped. They will have you singing along at the top of your lungs with all of the crowd favorites. Today you can see FVB all over Atlanta and its surrounding areas. Check his calendar and song list http://www.myspace.com/franciscovidalband. The concert is FREE but you may purchase reserved tables by contacting Smyrna Parks & Recreation at 770-431-2842.
Plan to bring the whole family and enjoy Wildlife Wendy’s Tropical Bird Show FREE; show times will be Noon, 2:00 PM, 4:00 PM, & 6:00 PM. Wildlife Wendy has been featured on the Tonight Show with Jay Leno, Winner on Animal Planet’s Pet Star, and events across the nation. A show for all ages, eight tropical birds are presented to entertain and educate the public on wildlife awareness. Wendy encourages guests to ask questions and talk to her after each show.
There will be an enormous Kids Zone with interactive inflatables featuring the 33’ Shark Slide, Euro Bungee Quad Jump, 24’ Rockwall, 120’ Roller Coaster Obstacle Course, and much more. For more information about the 2009 Taste of Smyrna Festival of Delectable, please contact Bill Watson or Matt Eyrich at JRM Management Services, Inc. at 770-423-1330 or matteyrich@jrmmanagement.com.
