New Stuff for 2009

Exciting new stuff is going on for homeowners in 2009 (if you consider tax credits exciting).

First, the recently passed stimulus plan gives first-time homebuyers a tax credit of up to $8,000. The IRS defines a first-time homebuyer as someone who “has not owned another home at any time during the three years prior to the date of purchase.” And it’s good for your principle residence only, not investment properties.

Unlike last year’s tax break, which gave a credit of up to $7,500 but requires the credit to be paid back over time, this tax break is yours to keep. No need to worry about having to shell out $500 per year to Uncle Sam until the “credit” is paid back.

The credit is offered only to those who purchase in 2009. They didn’t make the credit retroactive, so if you bought last year, you’re out of luck. You’re stuck with the “credit” that’s really a loan in disguise that has to be paid back.

Income limits do apply. For singles, your adjusted gross income must be less than $75,000, and less than $150,000 for married couples. If you earn more than the limits, you may be eligible for a reduced credit, so be sure to check with a tax professional.

Other restrictions are in place as well. For example, you’ll have to keep the house for three years. If you sell before then, you’ll be on the hook for the money. The IRS will consider some exceptions (say, death or divorce) but check with a tax professional first. When it comes to the IRS, don’t assume because…well, you know.

Other good news for homeowners is the raised cap on credits for energy-efficient improvements that you make to your home. It was raised from a maximum of $500 to $1500. Some examples of improvements that qualify are new windows, adding insulation, roof replacement, and more. For a complete list, visit http://www.energystar.gov/index.cfm?c=products.pr_tax_credits.

Hopefully, these credits will make tax time a bit more bearable. Until next time, here’s wishing you many happy returns!

Tiny Varner is a licensed real estate agent in Virginia, Maryland, and the District of Columbia. She loves her job. She can be reached at Tiny@TinyVarner.com.