Home Buyer Tax Credit Tips

First-time homebuyers are able to take an income-tax credit on their purchase, thanks to passage in Congress earlier last year of the 1st-time home buyer tax credit. The definition of first-time homebuyer is very generous. To get the credit, the homebuyer cannot have owned a home in the previous three years. And: The home must be a principal residence and purchased between April 9, 2008 and July 1, 2009.  The credit is equal to 10% of the purchase price, up to $7,500. Single taxpayers with modified adjusted gross income up to $75,000 and couples with MAGI up to $150,000 will qualify for full credit. Singles with MAGI up to $95,000 and couples with MAGI up to $170,000 will get a reduced amount. Those with higher incomes don’t qualify.  Stay informed with new laws and news related to home financing and foreclosure prevention at Jason Cardiff Tips online.

If the amount of tax a homebuyer owes is less than the amount of the credit, they get to keep the difference in the form of an IRS refund.  The homebuyer must begin to repay the credit in two years in increments of about $500 a year over a 15-year period for those who received the full credit.   Homebuyers who sell their home before the credit is repaid must pay off the home loan with any profits. If they sell the home at a loss, the loan deficiency is forgiven.  This credit is set to expire in mid-2009.  Read the original article.