$8000 Tax Credit May be Extended

The much coveted, desired and advertised $8,000 first time homebuyer tax credit may be extended after all.  Here is the latest:

WASHINGTON (Reuters) – The U.S. Senate should act later this week to extend a $8,000 tax credit for first-time home buyers that is scheduled to expire soon, Democratic Sen. Bill Nelson said on Monday.

“We should be able to extend that later this week,” Nelson, a member of the Senate Finance Committee, told reporters before joining President Barack Obama on an Air Force One flight to Florida.

“The existing law ceases to exist on November 1. This would be an extension for a limited period of time,” Nelson said.

We’ll keep you posted.

First Time Home Buyer Tax Credit

There is a great article over at The East Valley Tribune website on how you may be affected by the stimulus plan. There is so much in that bill that it’s worth getting familiar with some of the practical elements. The article has information on the different tax credit provisions (relevant if you’re seeking a new car for example) as well as the refundable first-time homebuyer tax credit. Here is what you need to know if you’re seeking to purchase your first home this year:

Refundable first-time homebuyer credit. First-time buyers can claim a credit worth $8,000 — or 10 percent of the home’s value, whichever is less — on their 2008 or 2009 taxes. The added bonus is that the credit is refundable, which means that filers will see a refund of the full $8,000 even if their total tax bill was less than that amount.

Remember you are officially a first time homebuyer if you have not owned real estate in the last three years. So, it doesn’t necessarily have to be your very first home.

Also, here is a great video explaining the$8,000 first time home buyer credit.

Via “The Phoenix Real Estate Guy” and the amazing Maureen Francis (miOaklandCounty.com).

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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