time home buyer, out of dozens that I have talked to, in the last 3 months have known about this benefit and he was a financial advisor.One of the main provisions of this bill is a $7,500 tax CREDIT for eligible first time home buyers and a tax CREDIT is far better than a tax deduction. This credit will directly reduce your IRS tax bill by up to $7,500. In instance, if your income tax owed to the IRS this year is $9,000 and you paid to the IRS through employer withholdings $9,000, you would be eligible for a $7,500 tax refund!
If your total tax bill is only $6,000 and you paid $6,000 already to the IRS through your withholdings on your paycheck, you will receive a refund of $7,500 which is more than you paid in!
Would you like Uncle Sam to give you $7,500 next year when you file your tax returns? If so, here is what you have to do—
· First, be a first time home buyer defined as someone who has not owned a home in the last 3 years.
· Buy a home with a value of $75,000 or more. If you buy a cheaper home your credit will be a little smaller.
· Must, buy a home between April 9, 2008 and June 30, 2009.
Please realize that this is money that does have to be repaid to the IRS over 15 years beginning in tax year 2010 in increments of $502 a year. Thus, it is essentially an interest free loan, which is the best kind of loan. You get all the benefit now (Instant Gratification) that you repay over time.
Now, how can you use this money to buy your first home? Really the only way possible is
to obtain a loan from a family member for the amount of your down payment, normally 3% of the sales price. Then, next year repay them when you get your tax refund. Another idea is adjust your W-4 Withholdings with your employer so that more money stays in your pocket. This would be a great idea if you intend to buy your first home in 2009.
Posts
No comments:
Post a Comment