In 2008, the new "First Time Home Buyer Tax Credit" law offered a $7,500 tax credit which would have to be repaid over time. It essentially amounts to a 15 year interest free government loan. With the new stimulus package in the works, that credit would no longer have to be repaid for homes bought from January 2009 through June 30, 2009.
The results may still change as Congress works out the details of the final stimulus plan. Until then, the old facts stand, and it's important to consider that a buyer who has not owned a principal residence during the three-year period prior to the purchase is a first time home buyer.
Keep in mind that tax credit is not the same as a tax deduction. The difference is that with a tax credit you get a dollar-for-dollar reduction in what you owe in taxes. That means if you owe $7,500 in income taxes and receives the $7,500 tax credit, you would owe nothing to the IRS. No special forms are required to claim the tax credit. You simply claim the credit on your federal income tax return.
The credit applies for homes purchased after April 8, 2008 and before July 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
Sandy Nelson
Olympia Realtor®, Associate Broker, GRI, ASP, Built Green
360-789-7505
www.SandyNelsonRealEstate.com
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