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A client who purchases a principal residence between January 1, 2009 and December 1, 2009 is entitled to a tax credit of up to $8,000 if he or she has not owned a principal residence during the three years prior to the purchase. The credit is reduced or eliminated for higher-income clients. For a married couple filing a joint return, the phase-out range is a modified adjusted gross income of $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000.
A client can claim the credit for a 2009 purchase on either the 2008 or 2009 return. Thus, a client can cash in on the credit by claiming the credit on an amended (or original) 2008 return or by amending his or her Form W-4 to reduce 2009 withholding.
Note. The IRS says a client cannot claim the credit in anticipation of a purchase that will take place by December 1. According to the IRS, until a purchase is finalized, which for most purchasers occurs at the time of the closing, the client does not qualify for the credit [First-Time Homebuyer Credit Questions and Answers at irs.gov]. Presumably this means that, not only is the client ineligible to file an amended 2008 return before the closing, he or she also cannot change Form W-4 prior to closing.
With today's market prices plus an $8,000 credit, now is a great time to buy a first home. To estimate how much mortgage you can afford or what your payments would be, try some of my online financial calculatiors at: http://tax-cpa.com/Financial_calculators.htm. Better yet, call a realtor for professional advice. Below are the phone numbers of a few local realtors who can help you find the property you are looking for.
Maria Montesdeoca, Broward County (954) 309-8662
Elena Metzkes, South Palm Beach County (954) 806-7835
Mike White, Central Palm Beach County (561) 312-7628
Carol Dubinsky, North Palm Beach County (561) 301-5538
Best Regards,
Paul Metzkes, CPA |
