Details Of The Extended Federal Home Buyer Tax Credit Programs
|
First-Time Homebuyers Can Earn Up To $8,000.
First-time homebuyers (who have not owned a home within the last three years) may be eligible for the tax credit. The credit for first-time homebuyers is 10% of the purchase price of the home, with a maximum of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Move-Up Homebuyers Can Earn Up To $6,500.
The tax credit program now gives those who already own a residence additional reasons to move to a new home. This tax credit of up to $6,500 is for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Purchasers are not required to sell their previous home, but
they must be able to demonstrate that the replacement house is or will
be their principal residence.
Deadlines Are Fast Approaching.
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
A Tax Credit Vs. A Tax Deduction.
It's important to remember that the tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps Now Apply.
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price Has Been Increased.
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
|
Time is running out! Buyers must be under contract by April 30th.
Call me if you have questions about these programs.
|
