Don't Mess With Taxes

What does it take to obtain the American Dream? A good paying job that will enable you to own a home of your own.

Both those desires include tax considerations that I examined in posts last week at my other tax blog.

Let's start with workplace compensation. Most of us rely on wages. Some employers, however, offer their workers added income options, with options being the key word.

Stock options are making a bit of comeback. The idea -- give people a piece of the company -- sounds cool.

But misunderstanding of rules by employees often means that stock options can turn into a costly tax surprise.

That's why my personal motto has long been "say it with cash."

Now about that house.

In 2008, Congress thought it would be a good idea to create a tax credit to help people, specifically first-time buyers, purchase homes. Then over the next few years, Capitol Hill tweaked and extended the residential tax break.

The thinking (hope) was that resulting buying spate would lift the housing market out of its post-bubble doldrums.

Wrong.

The real result? Essentially nothing.

A recent study by two Northwestern University doctoral students found the homebuyer tax credit had very little effect on the slumping housing market.

You can check out new posts each Tuesday and Thursday at my Bankrate Taxes Blog. And if you miss any posts there, you can find a wrap-up on them here each Saturday.

Related posts:

• Special investment taxes: mutual fund capital gains
  and 'Flash Crash' earnings
• Taking the sting out of stock losses at tax-filing time
• $15.6 billion in FY2010 first-time homebuyer claims

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