Over the past few months, it seems that congress and President Obama have passed a great number bills to help stimulate the economy. While many of these bills are viewed mainly as a bailout to some of the very people who got us into this mess in the first place, the First Time Home Buyers Tax Credit can actually help the people who need it the most.
The First Time Home Buyers Tax Credit is part of the American Recovery and Reinvestment Act of 2009, which is an economic stimulus packaged passed signed into law by President Obama on February 17, 2009.
The American Recovery and Reinvestment Act is intended to help jump start the economy and contains a number of provisions, including expanded unemployment benefits, tax relief, as well as the first time home buyers tax credit. Of the $787 Billion Dollars allotted for the American Recovery and Reinvestment Act $237 Billion is slated for individual tax relief, $51 Billion for Corporate Tax Relief, and almost $148 Billion has been set aside for healthcare. Other funds will goto housing, HUD, scientific research, Energy, and Infrastructure.
$6.6 Billion dollars has been allotted for the first time home buyers tax credit, which provides up to $8,000 towards the purchase of a home for qualified citizens. In order to be eligible to receive the tax credit, the buyer, and their spouse, muse not have owned a primary residence in the last 3 years and must make less than $75,000 a year, or $150,000 for couples. The tax credit is figured off of 10% of the value of the home up to $8,000.
The first time home owners tax credit can be used on almost any type of home, including houseboats, mobile homes, new construction, single family homes, manufactured homes, and condominiums. In order to qualify, the home must be purchased between January 1, 2009 and December 1, 2009.
This is not the first time that the Federal Government has offered an incentive to new home buyers. In fact last year, with the passage of the Housing and Economic Recovery Act of 2008, an $8,000 no interest loan was made available for those who purchased a home between April 8, 2008 and December 1, 2009. However, this loan had to be paid back by the homeowner.
The First Time Home Buyers Tax Credit of 2009, on the other hand, does not need to be paid back. However, it is necessary to live in the home for at least 3 years. Those that sell the home before then will have to return the money, although some exceptions may be made, such as in the case of divorce.
The 2009 Home Buyers Tax Credit can be claimed on either 2008 or 2009 tax returns. People who have already filed their 2008 taxes can file an amended tax return, which is usually processed within 8 weeks, allowing them to receive their tax credit early. While the full amount of the tax credit will be sent to those who owe nothing in taxes, including those with no income, if you have an outstanding debt with the IRS, the money will be used to pay this debt first.
When you look at the big picture, the First Time Home Buyers Tax Credit of 2009 makes up less than 1% of the $787 Billion American Recovery and Reinvestment Act Stimulus Package. However, this tax credit can be a big help to those who are buying a home for the first time.
Obama’s First Time Home Buyers Tax Credit can be a great way to help make a new home affordable, while taking advantage of historically low home prices and interest rates.
The First Time Home Buyers Tax Credit is available for up to 10% of the homes purchase price or $8,000, whichever is greater. This tax credit is different from previous tax breaks for new home buyers in that it does not need to be repaid. Other tax credits for new home buyers, like the 2008 tax credit were simply no interest loans offered by the federal government. This tax credit, on the other hand, is provided to the homeowner and does not need to be repaid as long as the homeowner lives in the new home for at least three years.
This tax credit, which is part of the American Recovery and Reinvestment Act of 2009, is a powerful tool that can be used to fix up the home, pay down the mortgage, or help out with bills. Since it does not need to be repaid, it can be a great way to increase equity in a home.
It is also not necessary to owe anything in taxes to receive the tax credit. This is because this is a tax credit and not a tax deduction, the latter of which would only count towards the taxes.
This first time buyers tax credit is a great tool for those who wish to purchase a new home. It can be used on almost any type of home, including manufactured homes, mobile homes, condominiums, town homes, traditional single family homes, and even houseboats.
While the home buyers tax credit can be a great tool, there are several restrictions. In order to receive the tax credit, the homeowner must:
Receiving the home owners tax credit is also relatively simple and it can be claimed on either the 2008 taxes or 2009 taxes. People who have already filed their 2008 taxes can choose to file an amended tax return, which allows the homeowner to typically receive the tax credit within eight weeks of the IRS receiving the amended return. Otherwise, the homeowner can wait until April 2010 and claim it on their 2009 taxes.
It is important to note that this tax credit will go towards any outstanding tax debts first, and the remainder will be refunded to the tax payer. For those that do not owe anything in taxes, the entire $8,000 credit is offered.
To take advantage of Obama’s First Time Home Buyers Tax Credit, the homeowner will have to complete the IRS’s Form 5045. For those who wish to receive their tax credit early and decide to amend their 2008 tax return, it will be necessary to complete a 1040X Form, as well as the 5045.
n an effort to help stabilize the housing market and our economy, President Obama and the United States Congress recently passed the American Recovery and Reinvestment Act of 2009. The American Recovery and Reinvestment Act has many provisions, including a tax credit for new home buyers.
With this tax credit, qualifying homeowners can receive 10% of the purchase price of the home or $8,000, whichever is greater. Unlike previous tax breaks for homeowners, the First Time Home Buyer Tax Credit does not need to be repaid.