Work & Money briefs

Keeping Track: new home sales

Largest single-month plunge since 1994

In contrast to a record increase in existing home sales, the first month of 2003 brought the largest one-month drop in new home sales in nine years. January's 15.1 percent decline comes on the heels of record-setting December, when new homes sold at a 1.077 million-unit annual rate, the Commerce Department reported.

But the housing market remains in good shape. Sales of previously owned homes - the biggest chunk of the housing market - hit a record monthly high in January, the National Association of Realtors reported. Low interest rates helped existing homes jump to a seasonally adjusted annual rate of 6.09 million.

Lack of Internet sales taxes hits states

With their need for revenue becoming desperate, some states are pressing the federal government to rescind its prohibition of Internet sales taxes. Currently, 34 states and the District of Columbia are working on some simple sales-tax rules to persuade Congress to lift the ban.

California stands to gain the most from such a change. In 2001, the state lost an estimated $1.7 million in potential revenue, according the Institute for State Studies in Salt Lake City, Utah.

Last year, online sales by US firms hit $79 billion, about 3 percent of all retail sales, according to Forrester Research. The 10 states listed below lost the most potential Internet sales-tax revenue in 2001:

A new tax credit for retirement savings

Some Americans scrambling to lessen their tax bite this year might be overlooking an opportunity to save up to $1,000 when they file next month.

The Saver's Tax Credit, new for tax year 2002 from the Internal Revenue Service, is a dollar-for-dollar tax credit on money a taxpayer contributes to a qualified retirement-savings plan.

With the credit, taxpayers can achieve a second tax benefit for their retirement savings - the first, of course, being the reduction of taxable income through pre-tax contributions to a plan.

It's a rare case of legal double dipping on taxes.

Taxpayers with the lowest adjusted gross incomes benefit most. Income qualifications: single filer with income of $25,000 or less, head of households with income of $37,500 or less, and married filing jointly with income of $50,000 or less.

"The Saver's Credit can work in connection with the Earned Income Credit to increase a taxpayer's savings," says Nana Mensah, head of tax services at H&R Block, the nation's largest tax-services company. "This is great news for many low- to mid-income taxpayers."

Word has been slow to spread. In a survey last week of 1,000 taxpayers by H&R Block, 83 percent of respondents had no knowledge of the new credit.

You've read  of  free articles. Subscribe to continue.
QR Code to Work & Money briefs
Read this article in
QR Code to Subscription page
Start your subscription today