Home owners who need mortgage debt relief are not the only ones who will benefit from the recent passage of tax relief for homeowners undergoing foreclosure. The Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 3648) has finally been passed by both chambers of Congress as of December 14, 2007 and has been signed into law by the President. This long awaited bill provides much needed debt relief to thousands of home owners who unfortunately have been caught up in the catch-22 of the sub-prime loan fiasco and are losing their homes through the foreclosure process. Once the adjustable rate loans on those homes “adjust up” the home owner almost always cannot afford the higher payments and the foreclosure tidal wave sweeps them from their homes.

Even worse, if the home owner made arrangements to sell the house for less than the actual mortgage, through what is commonly known as a short sale, the IRS came swooping in and claimed the difference between the actual sale price and the mortgage owed on the property as “earned income”. Not only do they lose their home through foreclosure, they also incur an additonal tax bill. Talk about a raw deal.

For example. If Joe and Jane Smith owned their home with an adjustable rate mortgage note of $500,000 and was paying at a low adjustable interest rate of 3% per year their payments would be approximately $1,250 per month. But after a two to three year period the interest rate adjusts to 5.75% on the same amount of $500,000. The payment adjusts to approximately $2,396 per month. Joe and Jane’s budget will only allow for payments of $1700 per month maximum. They are in trouble. To add insult to injury the real estate market is spiraling down and property values have taken a nose dive, including Joe and Jane’s home. The property’s value is now $400,000. Joe and Jane’s property value is now upside down. They can’t afford to pay the mortgage on the property and they can’t sell it even for the amount they owe on it. A “catch-22″.

The bank foreclosures because they can’t pay the mortgage. Joe and Jane in the meantime receive an offer to purchase the house for $375,000. The bank, because it knows something is better than nothing, agrees to accept the buyer’s offer and to release Joe and Jane from the responsibility of the $500,000 mortgage debt, a difference of $125,000. This is forgiveness of debt. To the IRS it’s called income. Under the IRS code the IRS could and in many cases has sought to tax the home owner for the debt forgiveness amount. In this case Joe and Jane, as if not already in enough financial trouble, would owe taxes on the $125,000 too. That is until the recent passage of the Mortgage Forgiveness Debt Relief Act of 2007.

This Act amends the Internal Revenue Code to exclude from gross income amounts attributed to a discharge of indebtedness incurred to acquire a principle residence (the one the home owner lives in). The amount of debt forgiveness can be up to $2 Million. This is great relief for all of the Joe and Jane’s of the adjustable rate world who just can’t keep their homes because the payments are too high and in many instances the property value has also decrease significantly.

THIS IS GREAT NEWS FOR TWO REASONS:

1. The current homeowner is relieved of a staggering and depressive tax obligation possibility, given a way to sell the home for less than owed on it and avoids a foreclosure on the home owner’s record.

2. Because the bank has taken the property back in its Real Estate Owned (REO) department it is very motivated to get rid of the property as quick as possible to avoid holding it and suffering a further loss as well as bank regulation demerits that a bank suffers when property is taken back after a mortgage failure. Here’s How The First Time Home Buyer Is Helped? It helps the first time home buyer in many ways. The definition of a first time home buyer is anyone who has not owned a home within the last three years prior to obtaining a mortgage on their principle residence.

The Mortgage Forgiveness Debt Relief Act of 2007 will increase short sales of homes that homeowners cannot afford and now know they cannot be held liable for any “debt forgiveness” tax. Sellers who are forced into foreclosure will have more flexibility in negotiating with the mortgage holding bank and the buyer who makes an offer to purchase the property. Since the property value is now very low it is an excellent time for a buyer to buy the property and lock in the interest rate at a fixed amount that the buyer can afford. A 30-40 fixed interest rate should be obtained. There are plenty of them available. The bank is inclined to work with the buyer in order to get rid of the unwanted inventory.

Remember banks are in the lending business, not the real estate business. They cannot make money unless loans are made. Holding property in inventory does not make the bank money. In fact they lose even more money because the home is now vacant, subject to vandalism and the maintenance and upkeep does not stop. The bank also has to hire a property management company to oversee the property. Get the picture. The bank does not want the property. It wants to sell it. This is great for a first time home buyer. He/she can get a great low market buy, locked in with a long term mortgage rate that they know they can afford before going into the loan and best of all when the real estate industry rebounds, which it surely will, the buyer will reap the benefits of increased value appreciation that helps to build a solid estate.

The first time home buyer can also use one or more of several down payment assistance programs that will help with the down payment on the property purchase. This is money that never has to be repaid. There are several local, state and federal programs available. Down payment assistance up to $50,000 or more is possible. Now is the time to Stop Making Your Landlord Rich!! and own your own home. Hope this helps somebody go out and make their dream of home ownership come true.

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If you like the video please rate, comment, or add to favorites. It is an amazingly easy way to help me out . If not its cool! OFFICIAL PCWizKid WEBSITE: PCWizKidsTechTalk.com SECOND CHANNEL www.youtube.com PCWizKid’s Blog.: PCWizKid.blogspot.com FOLLOW ME ON TWITTER www.twitter.com

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Cenk Uygur explains how massive tax breaks for corporations are creating large deficits for state budgets resulting in cuts to programs that help the poor and middle class, as well as decreased pay and benefits for public employees.

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In this Adobe Dreamweaver tutorial I will teach you how to make your first website with dreamweaver design. Adobe dreamweaver is a very powerful peice of software that allows you to design high quality and professional websites with html, css, php and various other scripting. Follow Me: www.twitter.com Music: Kevin MacLeod

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This is the VOA Special English Economics Report, from voaspecialenglish.com | http On November thirtieth, the European Central Bank took action to support the worldwide financial system. Central banks in Britain, Canada, Japan, Switzerland and the United States also acted. The banks made it less costly for other countries to borrow American dollars. The United States Federal Reserve said the joint effort was meant to help central banks in Europe provide financial support to nations that need it. The action sent American stock prices up more than three percent. On December first, European Central Bank President Mario Draghi suggested that the ECB may provide new financial support for European countries struggling with debt. But first, he said, euro area countries must establish trust by enacting big financial reforms. He said: “A credible signal is needed to give ultimate assurance over the short term. What I believe our economic and monetary union needs is a new fiscal compact, a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made. Seventeen members of the European Union share the euro currency. Concern over its future has been building in recent years. The Greek debt crisis, rescue loans for Ireland and Portugal and worries over Italy’s debt have all increased fears that Europe may have to abandon the euro. The euro is the world’s second most traded and second most used reserve currency after the …

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Incurring expenses is usually the focus of many business owners. Generally because it’s the easiest and most visible thing to look at. However, there are other considerations for controlling costs. The first one is to look at how you manage the flow of money overall. By this I mean your budgets.

I want to reiterate that if you spend the time upfront defining your budgets, then it’s a lot easier to manage the costs that are incurred down the track. It also allows you to then delegate the management of this process to the bookkeeper or financial controller.

1) TOP TIP: IMPLEMENT A SYSTEM THAT YOU ONLY PAY ON PURCHASE ORDERS

One of the most effective ways to control costs is once you have your budget defined, is to then implement a system where you ONLY pay invoices on purchase orders. This will stop employees ordering willy nilly in its tracks. Because as soon as you issue the edict to staff, you make sure that the accounts people ONLY pay where a purchase order is quoted.

For staff to spend money, this means that they have to request a purchase order from the accounts person. They would then check the budget to make sure that the amount is allocated, and that the person ordering the goods is authorized to make the order. If the answer is yes to both of these, then the accounts person would issue a purchase order which the person ordering the goods when then quote.

So when the invoice is received by the accounts person, they would then check that the goods have been delivered and that there is no outstanding issues to resolve. They would then prepare a cheque or online transaction for payment.

If there is no purchase order assigned, then they would refer it back to the supplier and/or the staff member who ordered the goods to resolve. I suggest being tough here – if its not assigned, then you don’t pay. It’s then up to the employee to settle the account – well essentially you probably would, but when there’s a perceived consequence, it usually puts the fear of god into them! They usually don’t spend your money again after that scare!

2) VALUE FOR MONEY

One of the areas that most business owners are usually fairly comfortable with is controlling costs. But let’s just go over the basics again. As a business owner, you should set a key performance indicator for your financial controller to be responsible for value for money. This means continually looking for different and innovative ways to control costs as a way of impacting your business‘ profitability. A dollar saved as a cost, goes directly to bottom line profitability. Some businesses find that by implementing tight cost controls and questioning the need for all spending has achieved the same profitability improvement that would otherwise have had to come from a substantial increase in sales.

Now I’m about to briefly go through a checklist that is available in the ‘Essential Financial Management Templates’ workbook which you can purchase from our website.

3) SHOP AROUND FOR DEALS

The first rule of thumb is to shop around. No matter who I’m dealing with, whether it’s a good friend or colleague that’s providing the service, I always compare it against two other quotes. Now, I usually don’t go straight for the cheapest option, but it does allow me to then go back to the original person and have an open and honest discussion about reducing the original cost. I always think about a comment one NASA astronaut once made when being asked about his feelings about being in space on a new space shuttle for the first time. His reply was, “how would you feel if you were about to fly in craft millions of mils into space, where your shuttle safety is completely reliant on our governments policy of sourcing the cheapest part possible.” Point well taken. It’s not always about going for the cheapest option, but it is about ensuring that you’re getting value for money.

4) COMPARE ACTUAL COSTS TO YOUR BUDGETED COSTS

Another point is to always review costs on an ongoing basis. I would suggest monthly – lets not wait until the end of the year or when we’re in strife, we should always be focused on ensuring that we’re getting value for money at all times. When you are going through your reports with your financial controller, use this as a time to look over your costs and compare them to your budgets.

5) THINK OUTSIDE THE BOX TO CONSIDER OTHER OPTIONS

Also be sure that you’re aware of what’s happening in the market place. Is there a new player who can provide competitive prices, or is there an online option available to you. Perhaps even a global possibility for you to explore. I’ll give you the example of a website. I had a friend who rung me to ask my opinion about a quote she had received on building a website. The quote was for $10,000. I referred her to a website called elance.com that has a global online bidding community. She placed a project brief for someone to build her a website and ended up getting one built for $1400. She was delighted with the quality and the end result – the only thing she did say was that she had to spend more time communicating with them (as they were overseas) but she was happy to do that to save herself $8,600!

6) CONTINUALLY REVIEW YOUR STANDARD PROVIDERS FOR THE BEST PRICES

Are there areas in your expense items that are being deregulated or additional players coming into the market. For example, electricity or gas providers, telephone providers, etc. You may be able to save money by consolidating accounts on your mobile phone bills. There are also telco providers that actually provide a free assessment service to see where they can save costs for you – use them!

7) REVIEW ELECTRICITY COSTS WITH AN ENERGY AUDIT

And while we’re on electricity costs, have you conducted an energy audit in your business to ensure that you’re not needlessly wasting money? For example, some energy reduction strategies could include turning off lights in offices that are not being used, or turning off the air condi8tioning system, photocopiers, printers and computers at the end of the day. Is there the potential to use electricity in “off peak” periods. Put timers on plant and equipment and put signs around your business reminding people to turnoff the lights and to save energy.

REIGN IN THE STATIONERY BILLS!

One of the biggest expense items in a business can be stationery. A lot of business owners won’t pay a $10 delivery charge to their business, but they will send an office person to pick up the stationery, at $25-30 an hour, plus allow them to purchase “whatever they need”. Have you ever tried not to buy an impulse item at a stationery store? It’s impossible – take it from someone who knows! Look also at the purchases that are being made in small quantities – can money be saved by purchasing in bulk – especially in printing. Make sure that one person only has the responsibility of purchasing stationery and ordering printing so that its not open slather of everyone in the business and they can also make sure that the items are actually required.

9) ESTABLISH A TRAVEL POLICY

Do you have a travel policy in your business? If so, it should clearly outline the class of air travel, grade of hotel accommodation and what expenses can be incurred and reimbursed. There are numerous accommodation site available now days that allow last minute bookings at a greatly reduced cost – have a look at wotif.com to see what I mean. Using this site means that you can actually book staff into 5 star accommodation at 3 star prices.

10) CHECK BANK CHARGES & FEES

Also consider bank interest, fees and charges – these should be checked regularly as banks often make mistakes in charging fees and interest. You should also maintain a record to interest rates and margins quoted by banks and shop around for the best interest rates.

11) REVIEW VEHICLE ALLOWANCES

Vehicle allowances are also another area of costs that can rack up pretty quickly when employees cotton to the fact that they can receive a nice little earner using the ATO vehicle allowance figures. If you have people using their vehicles a lot, you may want to consider whether you purchase or hire a pool car. Often the amount of money that you can spend paying vehicle allowances can actually pay off a company car – therefore building your assets at the same time. Another way to hand this is to offer to pay for all petrol costs instead. So everything an employee fills up, they just need to hand you the receipt and they’ll be reimbursed in full. This still adds up cheaper than paying a vehicle allowance – and is easier to budget for in your profit and loss projections.

Another way to further streamline this process can be to have fuel cards that link into a single account that you pay each month.

12) ESTABLISH BOUNDARIES FOR EMPLOYEE EXPENSE REIMBURSEMENTS

Always establish the boundaries for expense reimbursements in your business. Incorporate this into your induction program in your business so that everyone is extremely clear of the expectations. This is particularly relevant if you have a business development person who wants to have an “entertaining” budget. I usually empower people in this regard by providing them with a profitability target on sales made – which incorporates things like their entertainment budget. But more often, I’ll act6ually sit with them and run through ways to provide potential clients with value, without expenses “wining and dining” experiences. In fact, in my IT days, where everyone apart from me had a corporate credit card for “smoozing”. I was more effective with my sales because I would take people for a coffee.

13) MAKE SURE THE INVOICES YOU PAY ARE CORRECT

Advertising is another area where businesses can incur lots of charges. I’ve covered off on advertising in another CD in the Jump Start Your Business Series, but one thing I want to mention here is taking care with “bogus” invoices for advertising and checking that all invoices are actually for valid advertising. Now if you have a purchase order system or a centralized purchasing process, then you won’t get caught out on this one. But a few years back there was a scam where people were receiving invoices for “advertising” and then pressuring the accounts payable staff to pay them. A nice little earner made from the lack of internal systems in 99% of companies.

14) BEWARE OF OVERCHARGING!

I want to finish by talking about overcharging and the need to always check invoices against contracts or agreements. This includes rental agreements, any supplier invoices, etc. If in doubt, don’t be shy of asking the supplier to provide more details or query any inconsistencies. Errors are easily made and usually suppliers are extremely apologetic should a discrepancy be discovered.

15) ENSURE THAT YOUR PETTY CASH HAS A MONTHLY LIMIT

Despite your best planning, there will be cases when you need to have access to some petty cash – that is small amounts of cash for purchases that are fairly minor and random.

Make sure that the initial petty cash amount is realistic – if it keeps exceeding the amount each month, you need to establish where the cash is being spent and then put alternative strategies in place. However, I would strongly recommend setting a monthly limit that staff are aware of – for instance set a monthly amount of $150. Once it’s exceeded, it’s exceeded.

Taking time to reassess your costs will have a direct impact on your bottom line. However, be careful that you don’t focus more on cost minimization than opportunity creation. It’s easy to cut costs, but downright difficult to create more income. So be sure that your attention is focused in the right direction.

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Arfa Karim Randhawa (Urdu: ارفع کریم رندهاوا) (born 1996), a girl from the city of Faisalabad in Pakistan, who in 2006 at the age of 9 years and 7 months, became one of the youngest Microsoft Certified Professionals (MCPs) in the world. She held that record for about four months until it was broken by the Babar Iqbal at the age of 9 years and 27 days. The same year, she was invited to visit the Microsoft headquarters in Washington and to meet with Bill Gates, CEO and Chief Software Architect of the corporation. After being introduced to computers at the age of 6, Arfa prepared for her actual cerification examinations during her four month summer break from school. She holds an MPC in Windows Programming using the C# programming language. After first discovering computers at the age of five Randhawa pestered her father for a PC. She has been accepted into Pakistan’s Applied Technologies advanced computer institute. Randhawa is now a Microsoft Certified Application Developer but plans to become a Microsoft Certified Solution Developer, which involves building programs into broader systems for business.

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