Regarding the Homebuyer’s Tax Credit

First Time Homebuyer: If you have not owned a home in the past 3 years, you may be eligible for a tax credit of 10% of the purchase price up to $8,000.Current Home Owners: The tax credit program has been expanded to include you, giving you some additional incentives to move to a new home!  You’re now eligible for a tax credit up to $6,500 if you have owned and occupied your current residence for 5 consecutive years during the last 8 years. Here are some other eligibility requirements: The amount of income you can earn and still qualify for the full amount of the tax credit has been increased.  Single tax filers who earn up to $125,000 are eligible for the total credit amount.  Those who earn more than this cap, but less than $145,000 can receive a partial credit.  Joint filers who earn up to $225,000 are eligible for the total credit amount. T hose who earn more than this cap, but less than $245,000 cal also receive a partial credit. Important deadline: To qualify for either of these tax credits, you need to act now!!  All contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.  Qualifying buyers may purchase a property with a maximum sales price of $800,000.

Tax Credit vs. Tax Deduction: It’s important to consider that a tax credit is a dollar-for-dollar tax reduction, rather than a reduction in taxable income that would only save you a percentage of your deduction based on your tax rate.  Better still, the tax credit is refundable, which means you can receive a check for the credit if you have little or no tax liability to offset. Keep in mind the new tax credit program includes a number of details and qualification guidelines.  In addition, you may be able to benefit from additional housing-related provisions, such as funding for energy-efficient improvements.  For more information or answers to specific questions, please call or email me today.