Did you already hear that our President has extended the Tax Credit for home purchases?  And it not just for First-Time Home Buyers.  Current homeowners benefit too.  

Keep in mind, we are NOT tax professionals or accountants, and always recommend when it comes to your taxes to seek the advice of a Tax Professional.

So how does the tax credit work?  As usual, the IRS has some conditions you must meet to be qualified for the Tax Credit:

1) You must be a First-time Homebuyer. The IRS says you are considered a First-time homebuyer if you have not owned another Primary Residence at any time during the 3 years prior to the date of this purchase. In this case, date of purchase means the day your name is on the recorded Deed to the property.  And the maximum Tax Credit is $8000.

 

   OR

   

   You are a Current Homeowner.  You qualify if you owned and occupied your Primary Residence for 5 consecutive years out of the last 8 years.  An the maximum Tax Credit is $6500. 

2) You must have a written contract on your new home by April 30th 2010.  Then you need to close by June 30th 2010.  Closing means the Deed transfers into the Buyers name on or before June 30th 2010. 

3) Qualifying Buyers can purchase a home at the maximum Sales price of $800,000.

4) Your income* needs to be under $125,000 for Single filers, and $225,000 for Married filing Joint. If you make more than that, the Tax Credit is reduced based upon your income* level. 

*For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

Your tax credit can be used to pay your federal income taxes.  But here is some really great news:  If your tax liability is lower than the amount of your Tax Credit, the IRS will send you a refund check for the remainder.  And you can use that money for anything - no restrictions.   For example, lets say you owe $2000 in taxes and your Tax Credit is the full $8000.  You will get a $6000 refund from the IRS.

To get your Tax Credit, you don't need a pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return, by including Form 5405, First-Time Homebuyer Credit. The IRS has detailed information on their site, www.IRS.gov.

This is a GREAT time for First-time Homebuyers and Homeowners wanting to move, to take action and get a home. Several events, happening at the same time make this an opportune time:

A) Interest rates are still at historic lows.  Rates could rise at anytime, so it's urgent to take action before that happens.

B) There is a large inventory of affordable homes.  Including many foreclosures and Lender owned homes at bargain prices.

C)  $Money$in your pocket from the Tax Credit.

We would be happy to show you some homes and answer any questions you have on the Tax Credit. Call David at 480-444-2420.

Another reminder.  We are NOT tax professionals or accountants, and always recommend when it comes to your taxes to seek the advice of a Tax Professional.

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