Housing Assistance Tax Act of 2008

I wanted to get information to everyone on the Housing Assistance Tax Act of 2008. The Housing Assistance Tax Act of 2008 is designed principally to assist struggling homeowners and the housing industry. A major provision in the new law helps both the housing industry reduce its current inventory and existing homeowners sell their homes. It does so by creating new homeowners.

A new first-time homebuyer credit of up to $7,500 is to help entice middle-class taxpayers to get off the sidelines and buy their first home. This is a temporary tax credit and applies for homes purchased after April 8, 2008 and before July 1, 2009.

As with most tax law provisions, in trying to make the first-time homebuyer credit fair, Congress introduced some complicated rules. The basics rules are as follows:

• The credit is equal to $7,500 unless the purchase price is less than $75,000, in which case the credit is 10 percent of the purchase price ($3,750 for married individuals filing separately).
• Those with higher income are excluded from taking the credit. The new credit phases out for married couples filing jointly with modified adjusted gross income (AGI) between $150,000 and $170,000 ($75,000 and $95,000 for single taxpayers).
• A first-time homebuyer is someone (or a spouse) who has not owned a principal residence in over three years. Renters, even if they own a second home, can therefore qualify, as can someone who stopped owning a home three years ago.
• Qualifying homeowners who purchase within the allowed time period in 2009 need not wait to file their 2009 returns to claim the credit; they may do so on a 2008 return. Homebuyers also can find some immediate relief by lowering estimated tax or wage withholding to anticipate the credit. In no case, however, will the IRS present the homebuyer with a check for $7,500 at closing, although lenders and sellers may make some private financing arrangements to account for the credit.
• The credit amount ($7,500 or less) must be paid back to the government over 15 years starting with the second year after purchase. It is therefore more an interest-free loan than a permanent tax credit. There are exceptions in cases of death, and an accelerated recapture provision that may require an immediate payback of any balance due when the house is sold or no longer used as a principal residence.

If you have any questions, you can let me know.

Retail Sales Worries

I am encouraging all my business clients to read this article RGE - Retail worries by James Picerno originally in published in the The Capital Spectator.

These are challenging times and will require a new way of thinking and viewing our businesses.

Emergence of Second Tier Thinking

I have been fascinated with the work of Dr. Don Beck Spiral Dynamics: A model for human development & cultural evolution - WIE.org for a long time.

He says, "It’s not that we need to form new organizations. It's simply that we have to awaken to new ways of thinking. I believe it makes no sense to spend a lot of time attacking the current realities. It is time to create the new models that have in them the complexity that makes the older systems obsolete. And to the extent that we can do that, and do that quickly, I think we can provide what will be necessary for a major breakthrough for the future."

What I am fascinated about is that in my lifetime alone, I have been able to experience or see unfold the different cultures and world views that he teaches. This is clearly dempontsrated in the New York Time Magazine article on Sunday Barack Obama, A Free-Market-Loving, Big-Spending, Fiscally Conservative Wealth Redistributionist - NYTimes.com Read this for yourself and see this new way of thinking that is emerging that Dr. Beck talks about as "Second Tier."

Be well.

DISTICTIONS BETWEEN COACHING AND THERAPY

I have often been asked by potential coaching clients to explain the difference between coaching and therapy. So here is my explanation and most of it is taken from the work by Patrick Williams titled The Continuing Debate: Therapy or Coaching? What Every Coach Must Know.

Therapy is a medical and clinical model and relies on diagnosis. Deals with identifiable dysfunctions in a person and is about fixing the past. It deals mostly with a person’s past and trauma, and seeks healing. The questions always are “Why.” Therapy helps patients resolve old pain. Therapy focuses on processes and feelings, and assumes emotions are a symptom of something wrong. The therapist diagnoses and then offers professional expertise and guidelines to provide a path to healing. Therapy style is one of patient nurturing, evocative, indirect, cathartic and parenting. Progress is often slow and painful. The therapist is responsible for both the process and outcomes.

Coaching is a learning and developmental model focusing on attainable goals and possibilities. It deals with a healthy client desiring a better situation. Coaching is about understanding the past as a context for the future. It deals with a person’s present and seeks to help them design and act on behalf of a more desirable future. The questions asked are: How and What. Coaching helps clients learn new skills and tools to build a more satisfying and successful future and focuses on goals. The coach offers perspective and helps the client discover their own answers. Coaching focuses on actions and outcomes and assumes emotions are natural and normalizes them. The coach stands with the client and helps her or him identify challenges, then partners to turn challenges into victories, holding the client accountable to reach desired goals. The coaching style acts as a catalyst to challenge and is direct and uses straight talk and accountability. Growth and progress are often rapid and usually enjoyable. The coach is responsible for the process and the client is responsible for the outcomes.

Coaching today embodies the superior purpose of psychology. It is not just about pathology, diagnosis and treatment of human facilities. It is, more importantly, the study of human potential and possibility. Since we are by nature infinite and unlimited, all things are possible. The purpose of coaching is not to repair what has been damaged but to cultivate the genius that resides within the human mind and the generosity that resides within the human spirit. Most of us have a story that we have created about ourselves that is so small compared to our potential it is ridiculous. In A Course in Miracles, it says we have been given the wings of an eagle. Is the story you keep telling yourself the one you want? If not, when would now be a good time to do something about it?

Coaching is about empowering people and helping them discover what they want and what they can do, instead of focusing on what is wrong and what they can’t do. By doing this coaching improves dramatically the overall mental health and the quality of life, both personally and professionally. Which would you rather do, focus on the past and what went wrong, or focus on your strengths and write and create a future that is filled with purpose, passion, financial success, love and excitement? Today can be the first day of the rest of your exciting life if you choose it to be. Why wait?

Therapy is about recovering and uncovering, while coaching is about discovery. It is about discovering the greatness that lies within each human being and the possibilities which are limitless. What do you really want?

My company, Practical Empowerment LLC, Marty McEvoy - Practical Empowerment offers its coaching clients a multi-dimensional process, that is able to be put into practice and is workable, and that shows people how to gain power and control over their lives, so they can create and have what they really want. What do you really want? What about you income? What about your relationships? How about your health or your business?

You tell me what you want and I will show you how to get it. Call me today at 608-637-6898 or write me at marty@martymcevoy.com

2008 Housing Act - Property Tax Deduction for Nonitemizers

Some taxpayers do not itemize deductions and are not able to deduct the real estate taxes they pay. The standard deduction is taken instead. These taxpayers have not been able to take advantage of one of the more significant benefits of home ownership, that is, the ability to itemize deductions.

In the hopes of providing some relief to homeowners in a difficult economy, Congress has enacted The Housing Assistance Tax Act of 2008. One of the provisions in the 2008 Housing Act is an increase in the standard deduction for state and local real property taxes for homeowners who do not itemize deductions. The standard deduction is increased by the lesser of (1) the amount otherwise allowable to an individual as a deduction for state and local real property taxes, or (2) $500 ($1,000 in the case of married taxpayers filing jointly).

The increased deduction may be of real assistance to you.

Please call my office to discuss how this benefit, and other benefits of the 2008 Housing Act, can help your overall tax situation. I would enjoy discussing this with you.

IRS Offers e-Newsletter for Small Business

e-News for Small Businesses is a free electronic mail service designed to provide tax information for small business owners and self-employed individuals. It is distributed every other Wednesday.

Sign-up (view a representative sample (PDF) of e-News for Small Businesses) and you will receive information about:

Important upcoming tax dates for SB/SE customers
What's new for small businesses on the IRS Web site
Reminders and tips to assist small businesses/self-employed with tax compliance
IRS News Releases and special IRS announcements that pertain to SB/SE customers
Tax-related information from other federal agencies

When you subscribe, you will receive a confirmation message by e-mail. Remember, you must respond to this email in order to verify your subscription.
Subscribe Now

Quote By Dr. Maxwell Maltz

"I am a firm believer in 'negative thinking' when used correctly. We need to be aware of negatives so that we can steer clear of them. A golfer needs to know where the bunkers and sand traps are - but he doesn't think continuously about the bunker - where he doesn't want to go. His mind "glances" at the bunker, but he dwells upon the green. " Dr. Maxwell Maltz

New Small-Business Website

The National Small Business Association has started a new Web site. It is intended to educate small-business owners about proposals promoted by the IRS and Congress to raise revenue.



These proposals are aimed at the small-business owner. You can visit the site, http://www.preventirsabuse.org/ and find the following:

• How the NSBA aims to get the small-business community to speak out against the increase in IRS audits of small businesses.


• How legislation recently passed by Congress would require credit and debit card companies to report all electronic payments made to businesses.

The NSBA cited a recent study by the Transactional Records Access Clearinghouse that found the IRS increased its audits of small corporations by 41 percent between 2005 and 2007. Meanwhile, audits of the largest corporations plunged in 2007 to the lowest level in the last 20 years.

State and Local Taxes

The Tax Foundation The Tax Foundation - State and Local Tax Burdens: All States, One Year, 1977-2008 found that New Jersey residents paid 11.8 percent of their income in state and local taxes, while Alaska residents paid just 6.4 percent. The nation as a whole paid 9.7 percent of its income in state and local taxes this year, down from 9.9 percent in 2007, mainly because income grew faster than tax collections between 2007 and 2008.

After New Jersey, New Yorkers were in second place with 11.7 percent of their income taxed by state and local authorities, followed by Connecticut (11.1 percent), Maryland (10.8 percent), Hawaii (10.6 percent), California (10.5 percent), Ohio (10.4 percent), Vermont (10.3 percent), Wisconsin (10.2 percent) and Rhode Island (10.2 percent).

Next to Alaska, Nevada residents pay the least in state and local taxes as a percentage of income at 6.6 percent. That's followed by Wyoming (7.0 percent), Florida (7.4 percent), New Hampshire (7.6 percent), South Dakota (7.9 percent), Tennessee (8.3 percent), Texas (8.4 percent), Louisiana (8.4 percent) and Arizona (8.5 percent).

South Pacific - The Musical

The musical South Pacific South Pacific (musical) - Wikipedia, the free encyclopedia will be performing here in Viroqua, Wisconsin in September and the following is a quote from that show that I like and wanted to share.

“You’ve got to be taught to hate and fear, you’ve got to be taught from year to year, it’s got to be drummed in your dear little ear-you’ve got to be carefully taught!
You’ve got to be taught to be afraid, of people eyes who are oddly made, and people whose skin is a different shade- you’ve got to be carefully taught!
You’ve got to be taught before it is too late, before you are six or seven or eight, to hate all the people your relatives hate-you’ve got to be carefully taught!
You’ve got to be carefully taught!”

Here Comes Everybody

If you have not read the book, Here Comes Everybody: The Power of Organizing Without Organizations, by Clay Shirky, Here Comes Everybody - Wikipedia, the free encyclopedia I highly recommend that you obtain a copy and read it.

It is very well written and a great read. It has lots of relevant and current stories to explain the message.

In the same way that the printing press changed society and the telephone changed the way we communicate, there are now a host of new social tools, from instant messages and mobile phones to weblogs and wikis that are changing how we communicate and how we receive our information. This book is about these new tools and how these tools will change how we live, what we do and who we are.

Team Mottos

Following is a selection of mottos from some members of the 2008 Australian Olympic Team:

Success isn't final. Failure isn't fatal. It's courage that counts. Alicia Coutts (Swimming)

Strong minds suffer without complaining; weak minds complain without suffering. Melissa Wu (Diving)

Hard work beats talent when talent doesn't work hard. Glenn Warfe (Badminton)

It's not whether you get knocked down, it's whether you get back up that counts. Casey Eastham (Hockey)

Limitation is a creation of your mind. Ky Hurst (Open Water Swimming)

To be the best you have to beat the best. Ryan Carneli (Taekwondo)

What does not destroy us, only makes us stronger. Jane Saville (Athletics)

You always miss 100% of the shots you don't take. Wayne Gretzky Tully Bevilaqua (Basketball)

As you live, so you are. As you imagine, so you become. Amy Hetzel (Water Polo)

The more you practice, the luckier you get. Jade North (Football)

In order to succeed, you can not be afraid to fail. Tanya Bailey (Cycling)

Train hard, fight easy. Bradley Pitt (Boxing)

Whatever you can do or dream you can, do it. Boldness has genius, power and magic in it. - Goethe Jacqui Lawrence (Canoe Kayak)

Always believe in the power of your dreams and never ever give up. Nat Cooke (Beach Volleyball)

Stages of Human Development

Dr. Clare W. Graves was a professor of psychology at Union College. He was a specialist in the theory of personality and its application to industrial and medical problems. He held that human behavior can be broken down into seven patterns, or levels of existence. His theory suggested that every person falls somewhere between level one, a human vegetable, and level seven, the highest form. This information was first published in the Harvard Business Review in 1966, the theory attracted wide attention and Prof. Graves became the subject of numerous magazines and newspaper articles.

One of my favorite quotes from Prof. Graves follows:

“Each successive stage, wave, or level of existence is a state through which people pass on their way to other states of being. When the human is centralized in one state of existence, he or she has a psychology which is particular to that state. His or her feelings, motivations, ethics and values, biochemistry, degree of neurological activation, learning systems, belief systems, … education, economics, and political theory and practice are all appropriate to that state.”

Research has now shown that humans can move from one stage to another through certain transformative practices. This is how we grow and develop.

Be well.

The Housing and Economic Recovery Act of 2008 - Signed Today By the President

Congress has just passed, and President Bush signed today, a $300 billion housing bill to help restore confidence in the housing and financial markets. The bill is called The Housing and Economic Recovery Act of 2008. The new law includes more than $15 billion in tax incentives. These are some of the major provisions.

First-time homebuyer tax credit - The credit is essentially an interest-free loan from the government. Taxpayers who take the credit, which equals 10 percent of the purchase price (up to $7,500 for single individuals and married couples filing jointly; $3,750 for married individuals filing separate returns), must repay the credit. They will have 15 years to repay the credit in equal amounts. If a taxpayer sells his or her home before the end of the 15-year period, he or she will likely have to immediately repay any outstanding balance. Important income thresholds also apply. Additionally, the credit is temporary and applies to homes purchased on or after April 9, 2008 and before July 1, 2009.

Borrowers - Many homeowners are trying to refinance mortgages that offered low teaser rates but whose rates have now skyrocketed. The new law authorizes states to issue $11 billion more in mortgage revenue bonds for 2008 and allows qualifying sub prime borrowers to use their state's mortgage revenue bond program to refinance into a loan with a more favorable rate.

Property deduction for non-itemizers -There is a new standard property tax deduction for taxpayers who do not itemize deductions. Before the new law, only itemizers could deduct state and local property taxes. The housing act gives non-itemizers a limited deduction for state and local property taxes by increasing the amount of their standard deduction by the amount of property taxes they paid or $500 ($1,000 for a married couple filing jointly). You might benefit from this deduction if you have paid off your mortgage and no longer itemize. This is available only for taxes paid in 2008.

Home sale exclusion - A married couple filing jointly can generally exclude up to $500,000 in gain (single individuals up to $250,000). Before the new law, if a second home becomes a principal residence, after two years the owner could sell it and exclude up to $250,000 in gain from their income or up to $500,000 for couples filing jointly. http://www.irs.gov/taxtopics/tc701.html The new law pro-rates the exclusion between the time that a home is used as a principal residence and the total length of ownership, which includes any "non-qualifying" use as a rental or vacation property. The non-qualifying use before the January 1, 2009 effective date of the provision is not used in the calculation; neither are periods after a qualified use of the property or temporary absences of less than two years.

Down payment assistance - Seller-funded down-payment-assistance programs provide cash assistance to homebuyers who cannot afford to make the minimum down payment or pay the closing costs involved in obtaining a mortgage. The new law bans seller-funded down payment assistance programs.

Military personnel - The housing bill includes many provisions to help military personnel on active duty and veterans avoid foreclosure. Under the new law, service members and veterans are protected from foreclosure for nine months following a period of military service (rather than the current 90 days). Congress also made the VA home loan program more attractive and provided funding for disabled veterans to make accommodations in their homes for their disabilities.

So that is all for now. I will keep you posted as I know more. If you have any questions or comments on this article, let me know. I would love to hear from you. Until next time, remember, have fun and create a great day.

Be well.

How Your Paradigm Influences Your Cash Flow and Bad Debts

Today’s article is about how your paradigm influences your cash flow and bad debts. You might say how does that apply to me? Read on and you will learn how it does.

Athletes for years wanted to break the 4-minute mile. It was once thought to be impossible. Then on May 6, 1954, Roger Bannister Roger Bannister - Wikipedia, the free encyclopedia ran the mile in 3 min 59.4s. A challenge thought impossible by Bannister himself at one time. In fact after the devastation of his failure at the 1952 Olympics, Bannister spent two months deciding whether to give up running. He decided on a new goal: To be the first man to run a mile in under four minutes. Accordingly, he intensified his training. It all started with a decision. He asked himself the question, what do I really want?

When Wernher von Braun, considered by some the father of the space program Wernher von Braun - Wikipedia, the free encyclopedia was asked by President Kennedy what it would take to get to the moon. His response was, “the will to do it.” In fact one of Wernher von Braun’s other famous quotes is “I have learned to use the word 'impossible' with the greatest caution.”

Typically when we each of us set goals, we set our goal based on what we think we can do, or we base the goal on our past. This is our paradigm. It can also be called our belief system or our way of thinking. Our current paradigm is like a governor on our performance. We usually do not base our goal on what we really want. Additionally, we sometimes set our goal based on what others think we can do or on some study. We need to break these barriers of self-limitation. The truth is that all of us have infinite and unlimited potential and that all things are possible. Author Joel Barker writes “In order to change your future, you must be willing and able to change your paradigm.” Joel Barker -- Welcome So let’s look at a specific example.

My last article was titled “Accounts Receivable - How to Improve Cash Flow and Reduce Bad Debts.” I have worked with business owners for the past 36 years and one of the most challenging issues of every business is the collection of accounts receivable. In the article I made some recommendations that will improve cash flow and reduce bad debts for every business owner. One of those recommendations was to establish goals and standards.

One of those goals or standards might be the average collection period, usually expressed in day. That is the average number if days it takes for an invoice to be collected. In this example let’s say that our company collects its invoices within an average of 52 days. That is a long time considering the work has been done, employees and associated costs have been paid and that it is possible to have the average be zero days with today’s modern financial tools. These tools are credit cards, Paypal, automatic debit, etc.

So how would a business owner begin? That is, reduce the number of days from 52 to something dramatically shorter. It would start with the question, “What do I really want my average collection period to be?” Then the next step is to make a decision. Napoleon Hill wrote “God throws himself on the side of the individual who knows exactly what he wants, if he is determined to get just that.” The Napoleon Hill Foundation Then realize that for every result we want in our lives, there is a way of thinking and a way of acting. You have heard it said, “If you always do what you have always have done, you will always get what you have always gotten.” So you must change you thinking, your policies and your actions with regards to accounts receivable.

It is a simple as that. Success and decision are partners. If you have any questions or comments on this article, let me know. I would love to hear from you. Send me your success stories. Until next time, remember, have fun and create a great day.