Uh-oh, tax time is here again - but this year, there is a little more hope for filers: April 15th falls on a Saturday, requiring that all income tax returns must be postmarked by midnight, Monday, April 17th. Also, this year the IRS IS GIVING TAXPAYERS A NEW BREAK, allowing an option for a SIX-MONTH AUTOMATIC EXTENSION (this does NOT extend the tax-payment deadline) by filing application form #4868:

The new regulations provide streamlined and simplified procedures that are expected to save taxpayers between $73 million and $94 million, annually, by eliminating or consolidating several existing IRS forms. As a result, beginning Jan 1, 2006, most individuals and businesses will be able to request a full six-month tax-filing extension, WITHOUT A REASON OR EVEN A SIGNATURE.

Major itemized tax deductions for homeowners:

· MORTGAGE INTEREST - Interest on mortgage loans on a first or second home is FULLY deductible. LIMITATIONS: Acquisition loans up to $1 million and home equity loans up to $100,000. Keep in mind that if you are married, but file separately, the limits are split in half. Also, there are no tax restrictions on the use of money obtained from a home equity loan - you no longer have to justify your loan as meeting certain educational or medical requirements.
· TAXES - Property taxes (state AND local) can be deducted. Real Estate taxes are deductible only in the year they are actually paid to the government. Make sure you REVIEW YOUR SETTLEMENT SHEET CAREFULLY to see if you may have reimbursed your seller for a portion of the prepaid taxes through the end of 2005. Lenders are required to send your annual statements to borrowers by the end of Jan of each year, reflecting interest and taxes paid for the previous years.

· POINTS - When you obtain a mortgage loan, you often have to pay one or more points to get that loan. Whether referred to as "loan origination fees," "premium charges," or "discounts," they are still points. Each point is 1% of the amount borrowed. So if you obtain a loan of $250,000, each point will cost you $2,500. Points are deductible, but there are some complications so you should consult a CPA.

MetroStudy (a Houston-based real estate research firm) is confident that the CONDO MARKET WILL CONTINUE TO SOFTEN - Condo contracts are falling through because people aren't finishing the closing, throwing up some serious red flags. With all of the growth happening in suburban MD, it's estimated that 17,400 units will either be build or converted from rentals into condominiums. NORTHERN VA makes up the largest share of the region's condo market with about 24,000 units being readied for sale within the next three years. Compare this with the 9,900 units being built or marketed in the District!

Over the past 3 years, we have seen the housing values in MD soar 67% - the LARGEST INCREASE IN 25 YEARS! In suburbs near the District and Baltimore, these rates are even higher. Taking a look at the condo market - Ocean City's assessments rose 80% - the largest increase in MD. On one hand - HOMEOWNERS' HOUSES ARE MORE VALUABLE THAN EVER - this is likely to lead to a higher tax bill. There is a limit though, because state and local laws limit increases to no more than 10%. Look at MONTGOMERY COUNTY - housing values in the eastern part of the county have lagged behind those in more affluent neighborhoods to the west. These assessments are carried out every 3 years, and new assessments are phased in over the next 3. So what is making these values increase so much? The simple Law of Supply and Demand - however, the excessive influx rate of new residents is expected to fall slightly while retaining the high values. This is similar to MD's markets in the beginning of 2005.

Montgomery's Department of Park and Planning cited the median price for a NEW, detached house was $759,993, and for an existing house, $500,000. Taking a look at Howard County, supervisor of Assessments, Howard Levenson said that a STRONG PUBLIC SCHOOL SYSTEM MIXED WITH A SHRINKING POOL OF DEVELOPABLE LAND IS KEEPING PROPERTY VALUES HIGH. Even Calvert, where most of the affordable housing is, saw an increase of 74.7%. Like Howard County, they are a decline in available developable land. Conversely, we are seeing the opposite in PG COUNTY where Spokesman, John Erzen says there is A LOT OF DEVELOPABLE LAND there and that's why developers are coming in so fast. Take a look at the bottom of this newsletter for a complete comparison of all Maryland Counties and their respective Assessment Value Increase Rates.

"HOWARD COUNTY APPROVED SMOKING BAN in new bars and restaurants but agreed to allow establishments with separate smoking areas to keep them until 2010."

"FEDERAL GOVERNMENT DECIDED THAT THE INTERCOUNTY CONNECTOR IS ENVIRONMENTALLY SOUND, marking a significant step toward a 2006 construction starts of the highway in PG and Montgomery Counties. The 18-mile toll road between 270 and Interstate 95 would be one of the MOST EXPENSIVE TRANSPORTATION PROJECTS IN THE REGION, with a price tag of $2.4 Billion, potentially rising to $3 Billion after financing."

"MONTGOMERY COUNTY: Though MOONING is distasteful, it is not illegal in Maryland, ruling that 'if exposure of half of the buttock constituted indecent exposure, any woman wearing a thong at the beach at Ocean City would be guilty,' calling the alleged act, 'DISGUSTING AND DEMEANING.'"

INGREDIENTS:

· pie crust for 2 crust pie
· 3 Tbsp. unsalted butter
· 3 Tbsp. flour
· 1/4 tsp. pepper
· 1/2 tsp. dried thyme leaves
· 1/2 cup chicken broth
· 1/2 cup skim milk
· 1 cup shredded Colby cheese
· 1/4 cup grated Parmesan cheese
· 2 cups chopped skinless cooked turkey or chicken
· 9 oz. pkg. frozen broccoli florets, thawed and drained

PREPARATION:

Preheat oven to 425 degrees F. Line 9" pie pan with one of the pie crusts and set aside.

Melt butter in medium saucepan and add flour and pepper. Cook until this roux is bubbly, stirring constantly.

Add broth and milk, stirring constantly until mixture boils and thickens. Add cheese and stir until combined. Add chicken and broccoli. Pour into bottom crust. Top with second crust, cutting slits in top crust for steam to escape.

Bake at 425 degrees F for 30-35 minutes until crust is golden brown and filling bubbles. Let stand 10 minutes before serving. Makes 6 servings.

County	Assessment Value Increase
Anne Arundel	68.7%
Calvert	74.7%
Charles County	75.3%
Frederick County	71%
Howard County	74.3%
Montgomery County	70.4%
Prince Georges County	71.2%
St. Mary's	69.1%

Sources: "Realtors' Group Predicts More Normal Growth" The Associated Press, Tuesday, Jan 10, 2006; "Area Condo Sales Cooling After Record- Setting Year", By Kirstin Downey, Washington Post Staff Writer, Saturday, Jan 7, 2006, A01; --"Housing Appraisals in MD Rise 67%", By Miranda S. Spivack, Washington Post Staff Writer, Thursday Jan 5, 2006; B01; "Week in Review; Jan 1-7", Sunday Jan 8, 2006; "As Federal Government Contemplates Tax Changes, Make Sure You Understand the Current Rules.", By Benny L. Kass, Saturday, Jan 7, 2006; F06;