Friday, July 24, 2009

A new normal

> Title: A New Normal


> Date: For the Week of July 20, 2009


> People are beginning to realize (and even admit!) there are things to be learned

> from all that has caused so much pain, moaning, and bizarre reactions over the

> past year or so. The current recession has amounted to a wake-up call to some and

> a reminder to others.


> The reminder has come to those who have lived a bit longer and who climbed the economic

> success ladder through several decades of hard work. They remember what it was like

> before they could slap down plastic for every whim and be impulse shoppers. They

> recall things such as paying cash, saving to purchase, and repairing rather than

> tossing away and buying new.


> The wake-up call has been to the children and grandchildren of the people just described.

> It has even become trendy for them to compare notes with their once-extravagant

> peers about bargains found or the joy of eating at home. For some the motivation

> is not a shrinking paycheck so much as an enlarged environmental consciousness.

> Whatever the motive, the outcome is that simplicity is making a comeback. Thrift

> is in vogue. Frugal is fashionable.


> Michael Maniates, professor of Political and Environmental Science at Allegheny

> College, has been so bold as to put it this way: "Perhaps the silver lining [of

> the global recession] is that people are coming to realize they can live with less

> and their lives are richer for it."


> A Gallup Poll taken in April and reported last week in USA Today found that 27%

> of those interviewed say they are saving money now. What a contrast that is to the

> spending patters being reported two or three years ago! And 32% of those polled

> report they are not only spending less but also intend for the pattern of less spending

> and more saving to be the "new normal" for their lives.


> The 2009 MetLife Study of the American Dream produced another fascinating statistical

> insight. Nearly half of all consumers in the United States, 47%, report they already

> have what they need - up from only 34% in November 2006. I doubt the level of possessions

> owned changed so much as an attitude toward those possessions. Maybe something good

> has come from this mess.


> There is even a sneaking suspicion among some that we are looking at life through

> different eyes than we did in the greedy times of a quarter century ago. People

> seem to be valuing objects less but experiences and people more. We can only hope

> and pray it is so - and that such an attitude survives recovery.


> "Teach those who are rich in this world not to be proud and not to trust in their

> money, which is so unreliable. Their trust should be in God, who richly gives us

> all we need for our enjoyment. Tell them to use their money to do good. They should

> be rich in good works and generous to those in need, always being ready to share

> with others." (1 Timothy 6:17-18 NLT).

Friday, July 17, 2009

136 Days till first time home buyer tax credit expires!

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment,

You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:

•1. Contact a Lenders and get prequalified,

•2. Contact Nick Woodard to talk about your housing needs

•3. Close on your home purchase by November 30, 2009,

•4. Ensure that you are a qualified first-time buyer under IRS guidelines. Decide which year to file under, 2008 or 2009,

•5. File an amended 2008 return or choose to apply the credit to your 2009 tax return.

Deciding When to Apply the Credit

If you want the benefits of your credit as soon as possible:

You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.

If you anticipate a drop in income next year:

You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

Your Next Steps

Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:

•1. Fill out Form 5405 to determine the amount of your available credit, and

•2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return

Nick Woodard
Hodges and Fooshee Realty