First Time’s a Charm: The First-Time Home Buyer Tax Credit
Having spent the last five years as a tax consultant, there is nothing that I find more enjoyable than finding ways to save money for my clients, friends, and family.
For 2009, congress has made my job easy. Not only are they practically just giving away $8,000 tax credits, they are giving them away for something that most people are thinking about doing anyway! All that you have to do capitalize on this opportunity is…
BUY A HOUSE!
In addition to receiving an $8,000 refundable tax credit, today’s housing market is definitely a buyer’s market. Home prices are as low as they have been in years and home financing is as affordable as it has ever been.
Before you run out and put an offer down on the home of your dreams, make sure that you are eligible for the “first-time home buyer tax credit”.
To be considered eligible for the credit you must pass a few “tests” that include:
- You (and your spouse) must be considered a “first-time home buyer”. In other words, neither you nor your spouse may have owned a principal residence for the three years prior to buying the house.
- You must have purchased the home between January 1 and December 1, 2009.
- Your modified adjusted gross income must be $75,000 or less to qualify for the full credit ($150,000 for married couples). Those earning more than these amounts may be eligible for reduced credits.
The maximum tax credit is 10% of the purchase price of the house, up to $8,000. So, if you buy a $70,000 house, the tax credit is $7,000; for a $200,000 house, the tax credit tops out at $8,000.
If you have additional questions regarding this credit, please feel free to contact me at email@example.com.