Anchorage Daily News

Are you unsure how you might benefit from the economic stimulus package? Here are three possibilities that could put cash in your pocket.

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First are federal tax credits that encourage energy efficiency. So check your "honey-do" list, and you might find a few projects that could earn you a tax credit. Qualifying projects include items such as replacing your garage door, windows, insulation, roof and water heater.

There are a few qualifiers to getting this tax credit:

1) You get only 30 percent of the product cost (not installation), or a maximum of $1,500 of combined improvements that you complete in 2009 and 2010.

2) The credit is only for an existing home.

3) The home must be your primary residence.

To get the credit, look for a revised tax Form 5695 later in the year, then submit Form 5695 with your 2009 taxes next year. For tax purposes, make certain to obtain a "manufacture's certification" to ensure that the products qualify and keep all receipts for your records.

For more information go to: www.energystar.gov. Click on "Tax Credits for Energy Efficiency." While the amount of information is a bit overwhelming, many of your initial questions are answered in a "Frequently Asked Questions" box on that site.

Second is the tax credit for first-time homebuyers. You are a "first-time homebuyer" if you have not owned another principal residence during the three years before you purchased. For homes bought this year, the tax credit has four major differences over the 2008 program.

First, the credit was expanded to $8,000, or 10 percent of the purchase price, whichever is less, for homes bought between January 2009 and Dec. 1, 2009. Second, it is not a loan, but cash in your pocket. Third, even though you bought a house this year, you can file for the credit on your 2008 tax return. If you filed an extension, you have until Oct. 15 to claim it on your 2008 taxes. Otherwise, amend your 2008 return or just claim it on your 2009 return as you normally would.

There are a few exceptions:

• You must meet the modified adjusted gross income limits (MAGI). If you earned $75,000 or less, you qualify for the entire amount. For incomes between $75,000 and $95,000 the credit phases out. If you are married and filing jointly, the MAGI amounts are adjusted to $150,000 maximum with a $170,000 phase-out cap.

To find your MAGI, look at the last number on page 1 or the first number at the top of page 2 of your tax return.

• You must repay the credit, as additional tax on your next return, if the home is no longer your principal residence within 36 months of the purchase date.

• If the home is transferred to a spouse in a divorce settlement, that spouse is responsible for the entire amount; however at the death of a spouse, the surviving spouse must repay only half.

• If you received the home as a part of an inheritance or from a relative, you are not eligible.

Use Form 5405 to calculate your credit and put that number on line 69 of your tax return. If you are uncertain if you qualify, contact your accountant. However, for more general information on this tax credit visit the IRS Web site at www.irs.gov/newsroom. Click on the Feb. 25 news release headlined "Expanded Tax Break Available for 2009 First-Time Homebuyers."

Finally, another option that can put money in your pocket is to refinance. In a recent CNBC interview, U.S. Housing and Urban Development Secretary Shaun Donovan indicated that refinance activity was up over 80 percent since the housing plan was announced. The average homeowner saved about $2,000 annually after a refinance. However, even with interest rates at all-time lows, more than 9 million eligible homeowners have not yet refinanced.

If you have not checked into refinancing, contact your current lender and get quotes from other reputable banks. Cost comparisons will maximize your refinance savings. However, once you begin the refinance process and lock your interest rate, be patient. Appraisers and lenders are beginning to feel the push as homeowners try to capture low rates for maximum savings.

Clair and Barbara Ramsey are local associate brokers specializing in residential real estate. Their e-mail address is info@ramseyteam.com.

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