Homebuyer Credit Updated - I Don't Get It!

By Heather, CPA (Balance with Purpose)

What I mean is, I understand it, but I DON’T GET IT! So, I’ve got my own proposed legislation.

Congress decided to extend the parameters of the First-time Homebuyers Tax Credit to allow more people to take advantage of the credit. 1) Homeowners who have lived in the same house for five of the last eight years may be eligible for up to a $6,500 tax credit by purchasing a new home. 2) The new law raised the income threshold, allowing more Americans to take advantage of the benefit. 3) The availability of the credit, set to expire at the end of 2009, has been extended to at least April 30, 2010.

Great, right? Not-so-fast!

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More Debit, Less Credit (Finally!)

By MAD21

The Washington Post wrote an interesting article this week called, "For Gun-Shy Consumers, Debit is Replacing Credit." It's about how more and more people are using their debit cards instead of credit cards.

"The recession has cooled the American ardor for living on credit. After years of saying "Charge it," consumers are more often paying with their debit cards instead.

Worry about jobs, fear of fluctuating interest rates on credit cards and wariness about spending too much are contributing to the change."

Do you think people are finally learning the importance of living within their means? I sure hope so. There will be some industries that will hurt because of this, but honestly, we have too much 'stuff' out there to buy anyway and waaaay to many credit companies who are sucking our money away.

This is the first article I seen written about how "the system" is finally feeling the effects of people who are beginning to spend more wisely because of the state of the economy in the last few years. I hope it's a new trend.

Pirates, Knights and Credit Reports

By Renee, LSWA

"I'm singin' F to the R to the E to the E to the C to the R to the E D I T
RE to the PORT to the dot to the com, Come on everybody grab your bikes and sing along."

We all know the commercials and could probably sing every one of them, but do we really get it? Knowing what is on our credit report is crucial to everything we do from renting/buying a house, buying a car, even some jobs are looking at our credit reports. But beyond knowing what our credit report says, we need to be focusing on keeping our credit in good standing. I can not stress this enough. Get on a budget and keep yourself out of debt! I work with families every day whose only barrier to moving on from homelessness to self-sufficiency is poor credit. Landlords don't want to rent to someone who has a history of bad debt and/or foreclosures or evictions. Now I know that not all debt is the result of poor money management but the majority of it is.

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Debt That Is Forgiven By Creditors Is Considered Income

By Alan and Brian, CPA

I had someone make a statement at work that I wanted to look into. Since it was a money related, I asked Brian who is a CPA. I wanted to know: If you have a $10,000 debt to a credit card company, and through negotiation (because you can't pay the full amount), they relieve $5,000 of debt in order for you to only pay $5,000, is it true that the credit card company will issue a 1099 to the IRS in the form of income given to you? Are there times when this would not happen? This seems like this isn't really talked about, if true.

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