From the Wall Street Journal:
A tax credit currently limited to certain first-time homebuyers would expand dramatically under legislation introduced by U.S. Sen. Johnny Isakson, R-Ga.
Under the legislation, any buyer of a home - not just first-time home buyers - would be eligible for a tax credit worth 10% of the purchase price up to $15,000.
A tax credit passed into law earlier this year is worth only $8,000 and is limited to individuals and couples making no more than $75,000 and $150,000 respectively.
The legislation, which Isakson introduced Wednesday, quickly attracted co-sponsors from both parties, including Senate Banking Committee Chairman Christopher Dodd, D-Conn.
A beefed-up tax credit has strong backing from business and industry groups. The Business Roundtable earlier this week launched a campaign recommending the key changes to the credit that are proposed in the legislation. The National Association of Home Builders and the National Association of Realtors have also pushed for an expanded tax credit.
Still, the measure faces an uphill climb in Congress because of its price tag, which is likely to be high. Lawmakers would also have to justify assisting high earners purchase a home.
"One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can," Isakson said in a press release.
The legislation would extend the tax credit, which expires Dec. 1, by one year from the date of enactment. Homebuyers would be able to claim the credit on their 2009 tax return for purchases made in 2010.
Last week Roni Deutch, CEO of the Roni Deutch Tax Center, had an article published on WomenEntrepreneur.com explaining what taxpayers can do about IRS tax debts. You can check out a section of her article below, or read the full text at Do You Owe the IRS?
1. Fully pay. This may seem obvious, but the easiest way to resolve an IRS debt is simply to pay it in full. Consider selling a rarely used car or recreational vehicle in order to satisfy the IRS. While this is inconvenient and unpleasant, consider the alternative: IRS collections hounding you day and night, putting liens and levies on everything you own. Doing without a luxury item sounds a lot more appealing, don't you think?
2. Offer in compromise. If you can't pay off your entire tax debt, you might qualify for an offer in compromise (resolving the entire debt for less than is owed). Why would the IRS accept less than what is owed? Well, think of it the way a business owner might: Collection activities cost money. If you can get a lump-sum payment for as much as you can ever hope to collect, even if it's less than the total, there is a benefit in cutting your losses. While this is an excellent way to resolve a tax debt without destroying your finances, it is very difficult to qualify.