First time home buyer tax credit

[REBEL DUCK]

I should know the answer to this but don't. And every first timer i see has a different take. So does anyone on this site know how this obama bs first time home buyer tax stuff works. I have heard everything from the folks think they are getting a check to direct deposit to getting it knocked off there taxes.

[Faithful Retrievers]

Way it was explained to me you owe 1000 at the end of the year you get 7000 back in credit. I didn't get it so I really wasn't paying attention. I don't believe that it has to be paid back like last years.

[alabamabronco]

I just closed on my first house back in JAN. When I did my taxes, the account man showed me where buying a house knocked $8000 total off my tax bill.

[MallardManBD]

There are actually two versions of the first-time homebuyer credit. The first is for individuals that purchased their home prior to December 31, 2008. This is the version that is paid back over 15 years (500 bucks a year). This version maximizes the credit at the lesser of 7500 or 10% of your purchase price. The downside to this is you have to live in the home for 15 years or pay back the remaining credit in the year that you sell the home (ex. If you took the credit in 2008 and sold the home in 2010 you would owe the IRS a check to 7000 in 2010 because you had paid 500 already in 2009). There are some exclusions to paying back the entire credit in the year you sell ie. gain on sale.

The second version is for homes purchase after January 2, 2009. This version is the most advantageous for the taxpayer. Actually the two versions overlap each other and what I mean by that is you can still opt to take the repayable version for home purchased in 2009 which is crazy and should not be done by the taxpayer. The second version works the same way as the first on figuring the credit except it is maximized at the lesser of 8000 or 10% of purchase price.
This version is NON REPAYABLE and you only have to live in the house for three years after closing date to not have to pay any back. Which the other version is 15 yrs.

Remember to qualify for this credit you can not have owned a home for three years prior to purchasing the qualifying home and you can not purchase a home from a related party and qualify for this credit.

Consult you tax advisor.

Hopefully this cleared a few things up but if you have specific questions feel free to ask.

[pstone]

So I'm looking to buy my first house right now, and have been wondering about this. Will the tax credit be ammended to this years taxes where I get some of this years taxes back, or will it go on next years taxes and I won't have to pay 8000? Just been wondering. Thanks

[Rick_MS]

So I'm looking to buy my first house right now, and have been wondering about this. Will the tax credit be ammended to this years taxes where I get some of this years taxes back, or will it go on next years taxes and I won't have to pay 8000? Just been wondering. Thanks

You could do it either way: 1) amend 2008 return (even though you bought in 2009), or 2) use it on your 2009 return.

[MallardManBD]

You would for sure want to wait until the 2009 filing.

[LMB]

Why would you wait until 2009. I am closing on a house this month and I was planning on doing an ammended return. So i would like to hear your reasons to wait

[pstone]

I'd like to hear Pros and Cons myself....Wife wants new furniture...

[MallardManBD]

If you amend your 2008 return you would receive the initial benefit of 7500 bucks but you would also sign up to pay that 7500 back over the next 15 year at 500 bucks per year. If you opt to be patient and wait for the 09 filing you could possibly receive 8000 depending on what your purchase price is and not have to repay the money. The first version is like a no interest 15 year loan and the second version is a nonrepayable credit.

[jtdumallard]

this went way over my head BD. gonna have to talk in elementary terms. see you tomorrow. im bringing my 8 handicap with me

[Rick_MS]

If you buy the house in 2009, you qualify for the $8,000 credit.

This is an email I got a while back:


Media Relations Office
Washington, D.C.
Local Contact: Dee Harris
deirdre.y.harris@irs.gov
Contact No: 504-558-3081



First-Time Homebuyers Have Several Options to Maximize New Tax Credit
IR-2009-27, March 18, 2009
WASHINGTON – As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.
The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.
“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”
First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.
Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.
The filing options to consider are:
• File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.
• File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.
• Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.
• Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.
The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.
For more information, including guidance for people who bought their first homes in 2008, visit IRS.gov. To learn more about the overall implementation of the Recovery Act, visit http://www.recovery.gov/.

[pstone]

Thanks Rick!!!

[REBEL DUCK]

thanks guys for the help. I own me and a hometown bank a little lake house. I am going to see my tax man and see if i can maybe get this since they are just giving it out and since it was just a personal loan on the little shack i am in now maybe he can find a loop hole. I am bout to build no matter what somehow within next year if the good Lord is willing and the damn dont break! Thanks again RD