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July 24, 2013

Essay on Tax Related Events

Tax related events
Close your eyes and feels as you are in home are like the most warmth thing in the world. Home is the only place where you get relief after a long tiring day with a feeling of security, protection for your future, and your family. It is the one stop destination of everybody’s life. When you get back to your place, you want a stress free environment to spend a quality time with your family. A person always wants to spend a big portion of his life in happiness. We planned our life in a way that when we get old we have enough investments that we can spend rest of our life without loan or in need of money. This is the biggest dream of everyone’s life and to fulfill our dream we struggle a lot in our early life so that we can get a house of our own. Perhaps you put so many efforts, cut down your budgets, and go throw several financial crises just to have enough savings to purchase a house. Once our dream come true, you completely over whelmed with joy. The feeling of homeownership has no substitute.
I am writing this research after reading the home ownership, and business assistance act. According to this act the citizens who are buying their home for the first time in any state of United States have to pay a tax credit of $8,000 and for those who are buying it repeatedly will pay a tax credit of $6,500.  This extension is applied on the agreements that are signed in between January 2009 to April 2010 [] .Actually the defined tax credit is the 10% on the price of the principle residence purchase. Whatever the cost of your purchased house, you are required to pay it again within a period of 15 years or you can say that you have to pay it in equal installments every year during this period which is an additional tax on your income tax return. Although it is expired now but those purchasers who were out of the country for 90 days in between January 2009 to May 2010 will get one year expansion. Congress has extended the closing date. For those who have purchased their home by 30th April 2010, they can now complete their purchase by 30th September 2010[www.federal housing tax].
The criteria for eligibility of first time buyers programs is that you can be a part of this program only if the purchased home is your principle home and it should be the first time when you are buying a home in the last three years and you should live there at least three years as your primary place otherwise you have to refund the credit. The tax credit will be of 10% amount of the price of house sale. To qualify for the first time home buyer tax credit, you have to purchase the house within the extended period. Amount of credit will be deducted if the purchasing of home takes place after the stated period. The new IRS form 5405 must be submitted to receive your tax credit or rebate. There are some income limitations to qualify the home buyer’s tax credit program. [You can achieve the Americans dreams by James N Rivers]
     In recent years, it was estimated that most of the American citizens were overly burdened due to house hold rent in fact they were paying 50% of their total salary and for low salary citizens the situation is even more depressing. More than half of the population was suffering from the horrible conditions. In past due to racial issues the inaccessibility of housing is observed more in black and Hispanic group. It was a serious housing problem for all Americans. The basic reason is that the housing rents were at its peak even more than a worker’s earnings. The governmental policy for the economy was producing the worker of low wages. Their salary was not sufficient to afford a median price home in the city; they required approximately double salary to pay rents. This produced dramatically changes in the economical states of the families. One way out from the problem is the deduction of home mortgage.
     Home and family is the most sensitive part of our life this is the reason I am putting up the topic of home buyer’s tax. This has always been our fundamental issue. Home is of highly important social and economical value especially in American culture. Tax credit act is the bill that has introduced us with the feeling of surety that homeownership is now possible to millions of American citizens by helping in preliminary down payments and closing costs. The policy of home ownership and business assistance program will be helpful in the increment of employment ship at a greater extent. It will have a direct impact on economical state of United States along with psychological impact. The builders and retailers will not have its main commercial interest but banks and financial institutions that are providing loans for owning a residence. A transition from rental ship to ownership will cause a great change in history of America. Changes in house ownership and student loans does not have much impact than macro- economical changes have. The macro-economical policies affect the gross level of unemployment which is observed in the past years. We have been taking steps in the congress for the deduction of mortgage interest tax and for the elimination of capital gain in house sale. It would be helpful in conserving thousands of dollars that can spend in making their end meet. It is important to note down the value of owning a house in the investments for future, we can build our home equity for the betterment of our future life. The revenue obtained from the home mortgage deduction in the national trust fund can be used in providing assistance to lower level workers in the construction of their own house or it could be used for insurance program for small families. It was researched in the national study that in the top third levels of income tax payers the 44% of the people in young age are homeowners where as there is 28% gap in the lower third levels of income tax scale. In my opinion the reason for this difference is cleared, the cost of the down payment and mortgages cost are the biggest obstacle. To pay a large amount of down payment is impossible for those who are working day and night to cover their basic needs. These types of credits provide afterward advantages. They play a small role in helping people to get their home. The thing about the tax credit act which provides a sigh of relief to me and most of the home buyers is that we have a choice to claim the credit after buying the first home or directly transfers the amount to the bank at the last period which would help us in down payment or in closing cost. One of the best things about the bill is that it states that we can get the money from the treasury within 30 days of our application submission, depends on our eligibility criteria. The hard workers who are saving their money to buy a residence for the first time, including me are in favor of this law. I would feel happy to tell you the objectives of different authorities regarding tax credit bill.
Habitat to humanity international wrote in expressing their feelings that they advocate the leadership for passing the bill which put up the issue of providing affordable homes. They were cherished with the home buyers tax credit act; it would enable those who are unable to afford a house of their own and help them in facing two major obstacles of closing costs and down payments [congressional record]. Standard federal bank national associations acknowledged the first time proposal of home buyer’s tax credit act. National community reinvestment coalition and its member showed their gratitude by writing that they put hats off to the leadership for enacting home buyers tax credit and encourage them for passing the bill. More over they showed their willingness in providing assistance for introducing bill in the congress. National congress for community economic development supports the purpose of home ownership program since down payments and closing costs have been the greatest hindrance in homeownership for the families who are getting low income. The housing partnership encouraged the homeownership tax credit act because it is the first time that legislation is proposed which would be helpful in passing the barriers in owning a home. National council of LA RAZA wrote in their letter to a senator that they support the home buyer’s credit tax because it has the first priority of their mission to provide economical stability within the Hispanic community. National association of affordable housing lenders wrote that we strongly support the proposal which help middle class low level families to own a house because text credit will help them to cover down payments and closing costs. According to American bank association’s letter they commend leadership in introducing the text credit act. This legislation will provide important assistance in paying down payments and closing costs to the working families. National American Indian housing council, office of governmental affairs told the leadership of having a strong support for home ownership tax credit bill [Congressional record]. These positive comments showed the strong favor and diversity of the tax credit act.
     I believed that home buyer’s tax credit act is the key to fulfill our dreams especially to those families who have been encountering economical injustices. For me down payments and closing costs has now become a night mare for the first time home buyers, we might have left our dream unfulfilled but thanks to the government who have imposed the law of home buyers tax credit act which eradicates the barriers. The transferability is an innovative feature of tax credit act which led the families to overcome the payment issues. By transferring money to the mortgage mongers at closing, the credit is helpful in fermentation of money to finance the house. The family with a critical financial state who cannot even assume to buy a house of their own is now capable to move forward in this regard. It is now significant easier to accomplish their dreams to many Americans. This act has provided American citizens to a valuable recourse to overcome the serious hurdle to home ownership. This legislate elaborates the public policies to motivate the home ownership program which will be beneficial for both the society and the individual. This act is a step towards the racial and economical differences in the society.
     It is estimated that over 16.8 million people will habilitated in the next seven years by this brilliant step of the leadership. There are a lot of people who have been saving to return different loans along with supporting their families and still not able to let the both ends meet. These people would not be able to plan for owning a house; these consciences make it difficult for them to come up with an amount to pay closing costs and down payments but the tax credit act has brought a tremendous change in the life of middle class Americans. This bill would let them to move into their own new house much faster than ever before. Obviously we still have to preserve and make effort ourselves but this is a little step from the American government for the investment of our family. In the recent years we were hopeless about the poverty condition of many Americans. The enhancements in homeownership will stimulate the economy of America. This is undeniable fact that the home buyer’s tax credit provokes the economical activity in small businesses. It is a big financial innovation of the country.
      I am contented that the home ownership legislate has been applied. It helps to build strong communities and helps in providing financial stabilities for the millions of American citizens. The sentimentality of the word home can be understood by the warmth of this word. The stability of home brings good economical conditions and helps a lot of people to improve financial conditions of the family and make savings for their future. By the savings they can start a business which will contributes a key role in the bringing profits to the wealth of the country. This act has written a new chapter in the history of America to accelerate the economy of the country with a promise of providing basic step in homeownership.

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(2003).Congressional record (volume 149, part 10). United States of government printing office, Washington.
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James N. River (2009). You can achieve the American dream. Dog Near publishing.
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