I was doing some reading on the Tax credit for 1st time home buyers. Now if I am reading this right: It states you can have a reduced amount of federal tax with held from your pay check. This allows to you get a bigger pay check, with the intentions of saving this "extra" money for your down payment..........
It also states if you do not use it for down payment you must pay it back right away.
Here is the a snip it form the website:
Is there any way for a home buyer to access the money allowable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
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