Tuesday, April 14, 2009

$8,000 Tax Credit - a Reminder on How it Works

We get calls every day from people who are confused about the $8,000 tax credit for first-time home buyers. Here's what you need to know:

- If you (or your spouse, if you are married) have not owned your main home in the past three years, you are eligible for the tax credit. A "main home" is defined as the house you live in most of the time. This means you could have owned investment properties, or even a second home, as long as you did not own your "main home".

- If you have already filed your 2008 taxes, you can get the tax credit this year by filing an amended return. An amended return form is very easy to complete - it is not a full tax return.

- You need to purchase the house between January 1, 2009 and November 30, 2009 to get the credit.

- You do NOT have to pay the credit back.

- This is a tax credit, not a tax deduction, so you get all the money in your fist.

- If the house you're buying is less than $80,000, then you only get 10% of the sales price as a credit - not the entire $8,000. A $70,000 house would give you $7,000, a $60,000 house would give you $6,000, etc.

- If you make more than $75,000 and you're single, or more than $150,000 as a couple, the credit starts to get phased out.

- You need to keep the house as your main home for 3 years to keep the credit.

Check out our web site for access to the IRS form to claim the credit.

No comments: