Recently, President Obama has been talking about another mortgage help program for struggling homeowners. Now he has released his proposal, which is an expansion on the already existing HARP (Home Affordable Refinance Program).

Outlined below are the main points of the new HARP plan (based on The White House’s Fact Sheet).

Broad-Based Refinancing Plan

• Provides non-GSE borrowers access to simple, low-cost refinancing
-     You must be current on your mortgage and meet a minimum credit score
-     Your loan must be no larger than the current FHA conforming loan limits in your area
-     The loan you are refinancing is for a single-family, owner-occupied principal residence

• This plan will be paid for by a portion of a proposed fee on large financial institutions

• Streamlined refinancing for all GSE borrowers
-    Eliminates appraisal costs for all borrowers
-    Increases competition so borrowers get the best possible deal
-    Extends streamlined refinancing for all GSE borrowers

• Gives borrowers the chance to rebuild equity in their homes through refinancing

• Designed to provide streamlined refinancing for rural America

• Streamlined refinancing for FHA borrowers

Homeowner Bill of Rights
• Simple, easy to understand mortgage forms
• No hidden fees and penalties
• No conflicts of interest
• Assistance for “at-risk” homeowners
• Safeguards against inappropriate foreclosure

Pilot Sale of Foreclosed Properties
• Announcement of the initial pilot sale to transition Real Estate Owned (REO) property into rental housing to stabilize neighborhoods and improve housing prices

A Year of Forbearance for the Unemployed
• 12-month forbearance for mortgages owned by the GSE’s (Fannie Mae and Freddie Mac)
• Move by major servicers to use 12-month forbearance as a default approach, becoming the new industry norm

Investigations into Mortgage Servicing Abuses
• The Department of Justice, the Department of Housing and Urban Development, the Securities and Exchange Commission, and state Attorneys General have formed a “Residential Mortgage-Backed Securities Working Group” under President Obama’s Financial Fraud Enforcement Task Force

Project Rebuild
• Putting people back to work rehabilitating homes, businesses and communities

HAMP (Home Affordable Mortgage Program)
•Expanding HAMP eligibility to reduce additional foreclosures and help stabilize neighborhoods

For more information about the new HARP program, please see the following articles:

• www.bizjournals.com/phoenix/blog/business/2012/02/obama-announces-new-harp-plans.html

• www.mnn.com/money/personal-finance/blogs/obama-announces-new-plan-to-combat-housing-crisis

• www.upi.com/Business_News/Real-Estate/2012/01/25/Obama-HARP-Expansion-Builds-on-New-Refi-Momentum/9171327502942/

• www.huliq.com/4745/obama-unveils-new-federal-proposal-help-bolster-housing-market

• www.washingtonpost.com/blogs/ezra-klein/post/experts-react-to-obamas-new-housing-plan/2012/02/02/gIQAR3OmkQ_blog.html

• www.pe.com/incoming/20111111-21-facts-about-new-harp-program.ece

There is now buzz about a new financial transactions tax ― nicknamed the Robin Hood Tax ― which would place a small tax on financial transactions. Supporters of this proposal say that take money from the wealthy and help combat speculation. Critics, on the other hand, argue that it won’t raise much revenue and will bring about more job losses.

It may be relevant to note that Robin Hood stole from the royalty (whose wealth was no doubt unearned), while taxes take from successful businesses and people who earned their wealth in the market by providing goods/services. If nothing else, politicians in Washington are certainly desperate to find ways to reduce the national debt and lower the unemployment rate.

For more information about this topic, please see the following articles:

• www.cnbc.com/id/45583134

• www.bbc.co.uk/news/business-16074212

• http://biggovernment.com/newledger/2011/12/08/robin-hood-tax-would-hurt-the-little-guy-more-than-big-banks

• www.nytimes.com/2011/12/07/business/global/micro-tax-on-financial-trades-gains-advocates

The deadline for extending the payroll tax cut is December 31, 2011 – and politicians in Washington are in gridlock over what to do. President Obama would like to extend the tax holiday (already currently in place) for one more year and cut the employee’s share of the payroll tax from 4.2% to 3.1%. Obama warned Congress not to attach any other “extraneous” provisions to the payroll tax cut bill or else he would veto it. However, give the nation’s $15 trillion debt, Republicans on Capitol Hill are wise to be wary of passing any more legislation without figuring out how to pay for it first.

For more information about this topic, please see the following articles:

• http://www.washingtonpost.com/blogs/44/post/obama-warns-congress-not-to-attach-payroll-tax-cut-approval-to-keystone-pipeline/2011/12/07/gIQAxwRAdO_blog.html

• http://www.reuters.com/article/2011/12/07/us-usa-taxes-payroll-idUSTRE7B61IB20111207

• http://www.cnn.com/2011/12/07/election/2012/congress-payroll-tax-cut/?hpt=hp_t2

• http://www.csmonitor.com/Business/Economist-Mom/2011/1207/The-muddled-economics-of-the-payroll-tax-cut

You should contact the IRS if you have tax questions, such as how to respond to an IRS notice, how to resolve tax problems, how to eliminate tax debt, or to look up your tax refund status.

Individuals may call the IRS at (800) 829-1040. IRS customer service representatives can answer questions about individual tax return preparation, including situations where a taxpayer has received notice of a tax problem.

If you would like to talk to an IRS representative in person, then you should visit a local office or IRS Taxpayer Assistance Center. Refer to your local directory to locate the office in your area.

In case your tax problem has gone unresolved, you may contact the Taxpayer Advocate Service. The role of the Taxpayer Advocate Service is to assist taxpayers as they navigate through the complex tax system. This is a free service that helps to ensure that taxpayers have a voice at the IRS and helps to guarantee fairness.

If you are in doubt about any tax situation it is best to ask the IRS for assistance. Not filing a return or ignoring a notice will only delay the resolution of your problem. Many people find that it is much easier to comply with the requests of the IRS than it is to avoid them.

If you need to make a change to the tax return you already filed – such as report additional income, correct your filing status, or add/remove dependents – you should submit Tax Form 1040X to the IRS. Tax Form 1040X is the federal Amended U.S. Individual Income Tax Return. It is designed for taxpayers who need to correct mistakes made on Tax Form 1040, Tax Form 1040A, Tax Form 1040EZ, Tax Form 1040EZ-T, Tax Form 1040NR, or Tax Form 1040NR-EZ.

For more information about resolving tax issues with the IRS, please visit the following websites:

• www.banks.com/taxes/information-for-irs-tax-form-1040x

• www.irs.gov/contact

• www.irs.gov/taxpros/article/0,,id=98872,00

• www.irs.gov/individuals/content/0,,id=98196,00

• www.irs.gov/newsroom/article/0,,id=202425,00

• www.irs.gov/taxpayeradvocate

• blog.oregonlive.com/taxes/2011/resolving_an_issue_with_the_irs

When you open an IRA, make sure you are smart about who you list as the beneficiary. This may not help you after you are gone, but it is definitely a big deal to those you leave behind. If somebody other than a spouse is the heir, they must begin to take distributions by December 31 of the same year. That being said, they can draw money over the long term to ensure years of income free growth.

For IRAs and 401(k)s, earnings and contributions may grow tax-deferred, but distributions are fully taxable. If withdrawals are made after the age of 59½, they are free of penalties. If you have an IRA or 401(k) account, you must begin making withdrawals by April 1st of the following year after you turn age 70½ ― you must also pay taxes on these distributions.

For Roth IRAs and Roth 401(k)s, however, there are no minimum distributions. You may also make tax-free withdrawals from Roth accounts that have been owned for at least five years, if you are at least 59½ years old.

Note: The Worker, Retiree, and Employer Recovery Act of 2008 suspends the rules for required minimum distributions (RMDs) from certain qualified retirement accounts for the year 2009 only.

Tax Form 5498 is used to report contributions on IRAs, which include traditional and Roth, as well as Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP).

Many people are under the impression that they need Tax Form 5498 in order to file their final return. This tax form is for informational purposes only, and is not to be sent to the IRS along with your tax return. IRS regulations state that these tax forms must be sent to contributors by no later than May 31st of the next year. For this reason, most people have already filed their final return.

If you are not participating in a plan sponsored by your employer (such as a SEP IRA, SIMPLE IRA, or other qualified plan), the contributions that you make to your Traditional IRA are generally tax-deductible. If you do participate in an employer-sponsored plan, the deductibility of your contributions is based on your modified adjusted gross income (MAGI) and your tax filing status.

If you inherit an IRA, do not do anything until you know the rules and potential inheritance tax that governs your situation. For instance, did you know that you have to re-title the IRA unless you inherited it from a spouse? A spouse is in the best position in terms of withdrawals and avoiding inheritance tax. A spouse can roll an inherited IRA into his or her own IRA and in turn postpone distributions until turning 70.5. Like other IRA owners, the spouse may have to pay a 10 percent withdrawal penalty should they want to access the money in their own IRA before 59.5. To protect against this, it makes most sense to wait until after becoming 59.5 to rollover the funds.

For more information about taxes and IRAs, please visit the following websites:

• www.irs.gov/taxtopics/tc451

• www.banks.com/taxes/tax-strategies-for-retirees

• www.banks.com/taxes/tax-planning-for-inherited-iras

• blog.oregonlive.com/taxes/2011/10/paying_taxes_on_an_inherited_ira

• taxes.about.com/od/deductionscredits/qt/traditional_ira

For Social Security benefits, a portion of them may be taxable. This depends on your marital status and your total income. Your AGI (half of your Social Security benefits plus your projected income from all other sources), plus any tax-free interest from municipal bonds or foreign income, is called your “provisional income.”

If this sum is greater than $25,000 for singles (or $32,000 for married couples filing jointly), up to half of your Social Security benefits may be taxable. If your provisional income exceeds $34,000 for singles (or $44,000 for married couples filing jointly), up to 85% of your Social Security benefits may be taxable.

Other income sources include distributions from IRAs, 401(k)s, company pensions and annuities, and investment earnings.

For more information about this topic, please see the following articles:

• www.filelater.com/tax-resources/other-personal-income-tax-topics

• www.ssa.gov/planners/taxes

• www.forbes.com/2011/10/19/social-security-benefits-rising-workers-face-tax-hike

• dontmesswithtaxes.typepad.com/2011/10/social-security-benefit-increase-in-2012

• blog.american.com/uncapping-social-security-payroll-tax-is-hardly-a-panacea/

• money.cnn.com/2011/10/19/pf/taxes/social_security_tax

If you did not file your taxes by the original due date (typically April 15th), you should still file your return as soon as possible. The longer you wait to file, the more penalties and interest you will be charged by the IRS.

There are two main advantages to filing a late tax return and paying your back taxes. First, if you are owed a tax refund, you must claim in within 3 years of the return’s original filing deadline. Otherwise, you risk losing that refund altogether. Second, if you are self-employed and have not filed a return, you will not receive any credit towards Social Security benefits since your self-employment income has not been properly reported to the Social Security Administration.

For more information about how to file and pay late taxes, please visit the following websites:

• www.banks.com/taxes/when-to-complete-past-tax-returns

• www.banks.com/taxes/penalty-for-failing-to-file-past-tax-returns

• www.banks.com/taxes/how-to-file-your-federal-income-tax-return

• www.irs.gov/article/0,,id=108327,00

• www.irs.gov/article/0,,id=108326,00

• www.irs.gov/businesses/small/article/0,,id=122721,00

Regardless your situation, it is always best to file and pay your taxes as soon as you can. If you make no effort to pay your taxes, the IRS may levy your bank accounts and wages, or take other assets. Additionally, the IRS may file a Notice of Federal Tax Lien on a delinquent taxpayer which can have a negative impact on their credit rating.

According to the IRS, “If taxes are not paid, and no effort is made to pay them, the IRS can ask a taxpayer to take action to pay the taxes, such as selling or mortgaging any assets owned or getting a loan. If effort is still not made to pay the bill, or make other payment arrangements, the IRS could also take more serious enforced collection action, such as levying bank accounts, wages, or other income, or taking other assets. A Notice of Federal Tax Lien could be filed that may have a detrimental effect on a taxpayer’s credit standing.”

When you fail to pay property tax when it is due and continue to avoid doing so, a tax lien may be placed on your property. At this point, the only way to have the lien released is to pay your property tax bill in full or make arrangements to do so via a payment plan. If the IRS, state, or local tax bureau realizes that you have an unpaid property tax liability, they will send you a “bill” in the mail. They expect you to pay the amount due or make other arrangements as soon as possible. If you do nothing, they have the right to file a notice of tax lien.

Did you know that tax liens on real estate stay with the land? In simple terms, this means that a new owner can become responsible for debt incurred by a past owner. As a buyer, this is an important note to keep in mind. Most people do not want to get involved with a home that has a tax lien attached to it.

• www.banks.com/taxes/beware-of-tax-liens-on-your-property

• www.banks.com/taxes/filing-a-late-tax-return

• www.banks.com/taxes/tax-forms-payment-options

• www.irs.gov/irm/part5/irm_05-017-002

• www.irs.gov/newsroom/article/0,,id=201881,00

• www.usatoday.com/money/perfi/columnist/block/yourmoney

If you are buying a house, you know that you are likely to get some tax help in the form of tax deductions for mortgage points you pay as well as the mortgage interest you pay on the loan during the year. What about home sellers, though? Is there any tax help for those who are selling their property? The good news is that there is. If you have sold your house, you may be able to get tax help in the form of capital gains tax relief.

Capital Gains Tax Help for Home Sales

Prior to 1997, when you sold a home, you had to pay capital gains tax unless you bought a new home (a more expensive home) within two years of the sale. Since the implementation of the Taxpayer Relief Act of 1997, however, you can now avoid capital gains tax on profits up to $250,000 if you are a single filer ($500,000 if you are filing jointly). This is not a one-time tax break, either. This tax help is on a “per sale” basis, so each time you sell your home, you can take advantage of this relief.

It is important to note that there are requirements to meet in order to be eligible for this tax help. Firstly, the home sale has to be on your primary residence. If you are selling a property you bought as an investment or a home you’ve been renting out, you will still be subject to capital gains tax on the sale.

You can get around this habitation rule, though, if you live in the home as a primary residence for at least two of past five years. So, you can move into a home you have been renting out to someone else and as long as you live in it for two years, you can still get the tax help. On top of that, the two years do not have to be consecutive. As long as the total time lived in the home in the last five years equals 24 months, you are likely eligible for this tax help. So you can live in the house for a year, rent it out for three years, and then live in it for the final year of the five.

For more information about selling your home, please visit the following websites:

• www.irs.gov/publications/p523/ar02

• www.banks.com/mortgage/tax-help-for-home-sales

• taxes.about.com/taxplanning/home_sale_tax

• portal.hud.gov/hudportal/HUDtopics/selling_a_home

Do you need a copy of your past tax return? If so, you should first decide if you need an exact copy of your return or just a simple transcript. Many taxpayers are unaware that there are differences between exact copies and transcripts. Along with this, the process of getting an exact copy of a past tax return is much different than requesting a transcript.

To obtain an exact copy of your past tax return, follow these 3 basic steps:

1. To receive an exact copy of a past tax return, you must use IRS Form 4506 (Request for Copy of Tax Return). This is an easy, 1-page form that should only take you a few minutes to complete. Most of what you are asked to provide is basic identifying information.

2. You must send a check or money order with Form 4506, made payable to the “United States Treasury.” It costs $57 for each past tax return copy that is requested. (If the IRS cannot find your tax return, they will refund that fee.)

3. Mail Form 4506, along with payment for each tax return copy, to the address provided. The address you must use is based on your state ― mailing addresses can be found on Page 2 (General Instructions) of Form 4506.

Note that if your filing status is “married filing jointly,” either spouse can request an exact copy of a past tax return. In that situation, only one signature will be needed.

In some cases, it may make more sense to get a transcript of a past tax return rather than an exact copy. If you need access to your personal tax information, obtaining a copy of a past tax return costs $57 per return. Requesting a transcript, however, is simpler and free of charge.

There are two different types of tax transcripts:

Tax Return Transcript
This document will show most of the original information from your past tax return, but it is not an exact copy. Keep in mind that a Tax Return Transcript will not show any changes that may have been made after submitting the original tax return ― for example, if you filed Form 1040X (Amended U.S. Individual Income Tax Return). This type of transcript is typically used by people who are applying for a loan, such as a school loan or a car loan.

Tax Account Transcript
This type of document shows basic information, such as your filing status and adjusted gross income (AGI) from a past tax return. Similar to above, this transcript is not an exact copy. However, a Tax Account Transcript will include any adjustments that were made after the original return was filed.

For more information about past tax returns, please visit the following websites:

• www.irs.gov/individuals/article/0,,id=110571,00

• www.irs.gov/newsroom/article/0,,id=105370,00

• www.banks.com/taxes/copy-of-past-tax-return

• usgovinfo.about.com/incometaxandtheirs/oldtaxreturns