In today’s housing market, homes prices are at a historic low, as are mortgage rates. For those who have been saving money and waiting to buy a home, there are a number of really great deals available. This includes, of course foreclosures, of which there are literally thousands and thousands across the United States, but even new home builders have been feeling the crunch, so getting a great deal on a home is possible.
In addition to these incentives, the government is also offering an incentive of its own to help make buying a home easier and less expensive for new home buyers. This incentive comes in the form of a tax credit for first time home buyers, which can cover up to 10% of the homes cost, with a limit set at $8,000.
When figuring the amount of the tax credit, the lesser of the two values is used, so for a $60,000 home, only $6,000 would be received as part of the first time home buyers tax credit. For a $150,000 home, only $8,000 would be provided.
This is not the first time the government has offered an incentive to those who have purchased a home, as they have previously offered a no-interest loan. However, the current tax credit for new home owners is different in that it does not need to be paid back. Instead, the tax credit, with its $8,000 limit, comes in the form of a check that can be used by the homeowner to help cover the cost repairs, bills, or anything else that the homeowner needs.
The first time home buyers tax credit, which is often referred to as Obamas Tax Credit or Obamas First Time Home Buyers Tax Credit, is available to those who have purchased a home during 2009, specifically between January 01, 2009 and December 01, 2009.
The home can be a traditional single family home, a modular home, a manufactured home, and even a house boat. Mobile homes and new construction are also covered by the Obama housing tax credit.
There are several other provisions to the First Time Buyers Tax Credit, most notably that the home owners must not have owned another primary residence over the last three years. For those that are married, this stipulation applies to both spouses.
An income cap is also set, with those who make more than $75,000, or $150,000 for married couples, not being able to receive the full $8,000, although a partial tax credit may be available.
The major difference between this and other stimulus plans, such as the 2008 First Time Hombuyer Credit, is that the tax credit will not need to be repaid by the home owner. Instead, it comes in the form of a check and can be applied for when you file your 2009 tax return in April. It is necessary to include a Form 5405, with your standard tax return.
However, it is not necessary to wait until April and it is also possible to file an amended tax return. Simply follow the instructions to amend your 2008 tax return, including the IRS Tax Form 5405, and it is possible to receive the Obama Housing Credit within 8 weeks.
It is also possible to change the number of dependents you claim at work, so that less money is taken from your paycheck every month. However, if you decide to go this route, make sure you are 100% certain you are eligible to receive the Obama Tax Credit, because otherwise you will end up owing the IRS money at the end of the year. It is also a good idea to calculate how much you have received, so you do not exceed the $8,000 first time home owners tax credit.
It is important to note, that the funds of Obamas Housing Credit will be applied to any money you owe the IRS first, with the balance returned to the homeowner. However, those who do not owe any taxes, even those who do not have any actual income, will receive the full $8,000 tax credit.