Buying a House in 2009 Could Mean You Pay No Income Taxes This Year

The stimulus bill has not passed Congress yet, but there is a lot of excitement in the housing industry about the $15,000 tax credit contained in the bill. The President is eager to get the bill passed through Congress and signed into law. Regardless of the wisdom of the bill (and I know there are pros and cons), homeowners are bound to reap some huge benefits.  In fact the benefits could be so huge that you end up not paying any income taxes in 2009.

From my research it is apparent that this tax credit is designed to encourage high income people purchase homes. The tax credit applies to all income groups. The bill allows homeowners to split the $15,000 into two separate tax credits of $7,500 to be taken in successive years. What is interesting is that if you purchase a home then there is a chance you won’t pay taxes at all this year. I’m not a tax accountant but, according to the IRS to pay $7,500 in federal taxes, a family of four would have to earn about $92,125. If you’re below this income level and purchase in the right range you pay no taxes! And what I mean by the right rang is that the credit you receive is the less of  $15,000 or 10% of the value of the home purchased.

Pretty cool incentive to purchase a house this year. So, what are you waiting for?

Oh, I guess for the bill to pass and get singed! 🙂

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