How can a first time home buyers credit benefit me?
During the economic crunch every little bit helps. How about a tax credit that inspires college students, newly weds, and even those who have not owned a primary residence in years, to make one of the most rewarding purchases Americans strive for??
As a Realtor I am here to help you with that. Buying a home can be very exciting and overwhelming at the same time. It is essential to take the appropriate steps while coming to a purchasing decision. The good news about the tax credit is that any home qualifies: new construction or preowned. There are no limitations other than the income used to qualify for the mortgage. In other words, as long as the home has been purchased and lived in as the primary residence after January 1, 2009 and before December 31, 2009, the credit can be applied to your 2009 tax return. As always, please seek financial advice from your certified public accountant.
Who qualifies as a “first time home buyer” ?
Anyone that has never had the glory of home ownership is automatically qualified for this tax credit in 2009. However, if you were once a homeowner but have not owned in the past 3 years, then the credit also applies to you. When it comes to joint ownership, if either spouse has owned a home as a primary residence in the past 3 years then the married couple does not qualify. Since we are strictly dealing with primary residences, a vacation home or rental property does not affect the qualification for the first time home buyers tax credit.
Tax Credit or Tax Deduction? Let’s not get confused!
One thing I like to educate my buyers on is the difference between a tax credit and a tax deduction. This particular credit for 2009 is $8000.
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
With that being said………
….. Now is such a good time to become a homeowner. Low interest rates, reasonable prices, and tax incentives is evidence that owning a home can be affordable and rewarding at the same time. Talk to your Realtor today. We are professionals that strive in today’s market and committed to providing optimal customer service and begin lifelong relationships.
If you have any questions feel free to contact me. I will be glad to set up an appointment in hopes of finding the perfect home for you!