In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies [...]
What’s this new homebuyer tax incentive for 2009?(0)
Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on [...]
Who is eligible? Only first-time homebuyers are eligible.(0)
A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase. This is based on the exact day of sale of the prior home and not the calendar year.
You are not eligible if any of [...]
How does a tax credit work?(0)
Tax credits are better than Tax deductions. Every dollar of a tax credit reduces income taxes by a dollar. A tax deduction reduces the amount of taxable income that is subject to taxation. Credits and deductions are both claimed on an individual’s income tax return. To be clear, this incentive is a tax credit and [...]
- » So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?
- » How does withholding affect my tax credit and my refund?
- » Is there an income restriction?
- » How is my “income” determined?
- » What if I worked abroad for part of the year?
- » Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?
