First-Time Homebuyer Tax Credit 2009

The 2009 First-Time Homebuyer Tax Credit provides an excellent opportunity to buy a home! In an effort to stimulate the economy which has been greatly impact by the housing market, Congress has enacted legislation providing a tax credit of 10% of the purchase price of the home up to $8,000 maximum.

TAX CREDIT FACTS:

Who Can Claim it? The tax credit is for First-Time Home Buyers only.
- A First-Time Homebuyer per IRS definition is someone who has not owned a principle residence during the 3 years prior to this purchase.

How Does it Work? The 2009 tax credit does NOT have to be re-paid!

*HOT TIP: The new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year. Although, if you bought early in 2009 and have already claimed the 2008 credit that must be re-paid, you can admend your return to "exchange" that credit for the non-repayable 2009 credit.

How Much Money is it? The tax credit is 10% of the purchase price of the home up to $8,000 maximum.

Example 1: 10% of a home that sold for $150,000 would be $15,000, the new homeowner could only claim $8,000 tax credit
Example 2: 10% of the purchase price of home that sold for $70,000 would be $7,000, the new homeowner could only claim $7,000 tax credit

*HOT TIP: After you close, you may file an admendment on your 2008 tax return and receive your money now vs. waiting until tax season 2009 to file for your credit.

How much time do I have to use it? The tax credit is available on homes purchased on or after January 1, 2009 and before December 1, 2009.

*HOT TIP: If you are planning on closing towards the end of the year, schedule your closing No Later Than November 20, 2009 as Thanksgiving Holidays fall on the last Thursday of the month, November 26th, to avoid the risk of not closing in time.

What are the Income Limits? Single taxpayers up to $75,000 & Married taxpayers up to $150,000 are eligible for the full tax credit. Taxpayers making over these amounts will be phased out.
- Use IRS Form 5405 to claim the tax credit.

Other Requirements:You must use the home as your principle residence for a minumum of 36 months, or the tax credit will have to be re-paid.

Want to take advatage of the Tax Credit? Please contact me today Amy@BestAgentsInTexas.com

Sill have questions? Visit www.IRS.gov .

*** As with all tax related matters we recommend you contact your CPA or tax professional to ensure the latest rules and guidelines are followed. ***