First Time Home Buyer Credit of $8000

[+ExitTriCounty]

It is kind of amazing just how much you don’t hear about the “new and improved” first time home buyer tax credit. As part of the stimulus package Congress has sweetened the deal, so to speak, by increasing the maximum first time home buyer credit from $7500 to $8000. And even more important, this credit is no longer a 15 year, interest free loan from the government. The qualifying homebuyer does not pay this back. As I understand it, the credit of 10% of the purchase price or $8000 whichever is less, actually lowers the taxes paid on a dollar for dollar basis. So the credit is different from a tax deduction. Again, the credit lowers dollars paid and a deduction lowers the adjusted income on which taxes are paid.

To get the “new and improved’ first time buyer credit of up to $8000, one needs to close the purchase of a home between January 1, 2009 and November 30, 2009. The home has to be located in the U.S. and must be the buyers “main” home. Those who have not owned a home during the 36 months previous to their purchase will also qualify. There are income qualifications to get the full credit. Your adjusted gross income can’t be over $75000 for a single person or $150,000 if married and filing jointly. A buyer can actually get a tax refund if no taxes are owed. Married buyers filing separately will have the credit reduced by half.

Of course, Congress has a bad habit of writing tax code that only a tax professional can understand. And this law is no different and can be tricky. It is always a good idea to consult a tax professional for a complete explanation of this attractive home buying credit.

If you have any questions, I’d be glad to help.

 

[ginabwade]

Would this apply if you are refinancing a current property in a first time homebuyers name? I seriously doubt it, but thought it was worth a try?

[3KIDS4US]

Unfortunatly, this doesn't apply to a refinance. If it is an inital mortgage it does. I am with H&R Block, and if you need any tax assistance with this, we would be glad to help.

 

[+ExitTriCounty]

Would this apply if you are refinancing a current property in a first time homebuyers name? I seriously doubt it, but thought it was worth a try?

Yep, purchase only.

 

[matthewspiglet]

YOUR PAYCHECK: Stimulus will lower income taxes

 

 

 

By Brandee A. Thomas

bthomas@gainesvilletimes.com

 

POSTED March 1, 2009 12:30 a.m.

 

 

In his recent address to Congress, President Barack Obama stated that most Americans will see larger paychecks beginning April 1, aid that economists had been hinting would come.

It's one of the tax breaks or credits included in the $787 billion American Recovery and Reinvestment Act of 2009.

"The good part is that tax payers don't have to do anything to receive the increase. Employers will be responsible for making the adjustments," said Mark S. Green, the IRS spokesperson for Georgia. "The amount of increase a person will see will depend on their income bracket and their number of allowances."

 

Through the stimulus plan, the amount of federal income tax withheld from an individual's paycheck every two weeks will be reduced, as will tax liability. So while individual federal tax refunds will remain about the same, workers will be able to bring home more money during 2009.

 

Tax liability will be reduced by $400 for most individuals and by $800 for most couples through the Making Work Pay Tax Credit. This credit is estimated to cut taxes for 95 percent of working families and will cost the federal government around $116 billion over the next 10 years.

 

The stimulus package also extends the First-Time Home Buyer Credit. Last year, Congress established a tax credit of up to $7,500 for homes purchased before July 1, but required homeowners to repay it over a period of 15 years, or if the home was sold during that time. The stimulus plan eliminates the repayment obligation for homes purchased after Jan. 1, increases the credit to $8,000 and extends it through Dec. 1.

While portions of the economic stimulus plan were designed to put money in the pockets of working Americans, it also has help for people collecting unemployment.

 

The plan not only increases weekly unemployment benefits by $25 through 2009, it also provides for up to 33 weeks of additional unemployment benefits for workers who have exhausted their regular benefits. The two measures account for nearly $36 billion.

 

With nearly 9 percent of Georgia's work force unable to find jobs, the additional benefits could go a long way in helping the more than 300,000 Georgians without jobs. But Gov. Sonny Perdue has said that Georgia may turn down at least a portion of the funding because long-term repercussions may outweigh short-term benefits.

 

According to federal officials, the entire stimulus plan is estimated to save or create around 106,000 jobs in Georgia alone.

 

 

 

 

http://www.gainesvilletimes.com/news/article/15454/

[amanda_rip]

Great

 

So the $7500 homebuyer "loan" we just did completely SUCKS compared to this deal.

 

 

[rebelmom]

Great

 

So the $7500 homebuyer "loan" we just did completely SUCKS compared to this deal.

 

 

Yep! My son just did the same thing. Has to pay back. That stinks.

[Animal]

Isn't it nice that this governor turn down money since he is leaving office.