First Time Buyers: Consult with Your Tax Accountant Early This Year!

The  economic stimulus package has many provisions which will affect the real estate market.  For first time buyers, there is an attractive  tax credit which will apply to purchases closed before December 1, 2009. It is important to pay attention to the details of the tax credit and consult with your tax accountant to see if you qualify.

I  recently received the following update :

"Tax Credit for Homebuyers

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.  Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.  Buyers will have to repay the credit if they sell their homes within three years."

The income qualifcations are based upon "adjusted gross income" which can be affected by many items. Tax filing season is just around the corner.  Make your appointment early with your tax advisor to see if you can qualify as a first time buyer for this credit.