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Pinellas County homebuyers: Don’t miss the $8,000 first time homeowner tax credit

    More than half of the people who plan to buy a home in the U.S. this year are first-time homebuyers. And ALL of them should look into the $8,000 tax credit that is being offered to first-time homebuyers this year by the federal government
 
      This is a pretty exciting to for first-time homebuyers to get into the market, what with very low prices and historically low interest rates. The $8,000 tax credit is just icing on the cake. It’s hard to imagine that such a “perfect storm” of home-buying advantages will come together again, at least in the lifetimes of most of us.

      Are people really aware of the first time homeowner tax credit? Apparently so – the IRS says that of all the 2008 tax returns filed by March 6, more than a half-million returns claimed the first-time home buyer credit.

      If the tax credit sounds good to you, don’t wait too long – it is only available until Dec. 1, 2009.

 Here are the nine most important things you need to know about the tax credit:

     1. The credit is available to all first-time buyers of any kind of home, new or re-sale.
 First time home buyers are defined as people who have not owned a residence during the three years prior to the purchase date.

     2. The tax credit is an amount of money equal to 10 percent of the home’s purchase price, up to a credit of $8,000.

     3. The income limit for a single taxpayer is $75,000; for married taxpayers filing jointly, income must not exceed $150,000.

     4. If you exceed the income limits, you may qualify for a partial tax credit.

     5. The tax credit does not have to be repaid. Previous tax credits were really interest-free loans.

     6. People who buy homes and claim the tax credit must use the home as a principal residence for at least three years. Those who fail to do that may have to pay the credit amount back to the government.

     7. Claim the tax credit on your federal income tax return by using IRS Form 5405. No other application or form is necessary.

     8. The credit may be claimed even if you have little or no federal income tax liability. An example: You had withholding in the amount of $4,000, but ended up owing taxes totaling $5,000. Normally, you would owe the government another $1,000 on top of what was withheld. However, if you purchased a home and claimed the tax credit, the IRS would send you a check for $7,000 – the $8,000 tax credit minus your $1,000 tax liability.

     9. The tax credit is a dollar-for-dollar reduction in your tax liability. In other words, if you owed the IRS $8,000 in income taxes for 2008 and you claimed the $8,000 tax credit, you would owe the IRS nothing.

Want to know more? Take a few minutes to listen to an expert – Robert Dietz, the tax economist for the National Association of Home Builders. Click on the YouTube icon above.

Tags: Add new tag, first time homebuyer, pinellas county, tax credit

This entry was posted on Friday, May 1st, 2009 at 11:35 am and is filed under First time homebuyers, North Pinellas County, Pasco County, taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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