Who Qualifies for the $8000 Stimulus Pkg Tax Credit

2009-02-20T13:45:00.000-08:00

As you are all undoubtedly
aware, there is now a tax credit available to first time home buyers
up to $8,000. The following are some important items to remember related
to this credit:

1 – A first time home buyer is defined
as someone that has not owned a principal residence in the three year
period preceding the home purchase.

2 – The new home purchase must occur
on or after January 1, 2009 and before December 1, 2009.

3 – The tax credit is equal to 10%
of the home’s purchase price up to a maximum of $8,000.

4 – Single taxpayers with adjusted
gross incomes of $75,000 or less qualify for the entire calculated credit
amount.

5 – Single taxpayers with adjusted
gross incomes of $95,000 or more do not qualify for any of the credit
amount.

6 – Married taxpayers with adjusted
gross incomes of $150,000 or less qualify for the entire calculate credit
amount.

7 – Married taxpayers with adjusted
gross incomes of $170,000 or more do not qualify for any of the credit
amount.

8 – Single and married taxpayers with
adjusted gross incomes between the amounts listed above will have the
credit reduced on a proportional basis.

9 – This $8,000 tax credit is different
from the $7,500 credit instituted last year in that the new credit amount
does not require repayment as long as the taxpayers use the home purchased as a principal
residence for at least three years after the purchase. If they do not,
recapture of the tax credit could apply.

10 – The tax credit is refundable.
This means that a taxpayer could get this refund even if their tax situation
did not require them to pay in any taxes during the year.

11 – Unlike the $7,500 tax credit from
2008, this tax credit can be used in conjunction with mortgage revenue
bond programs.

12 – A taxpayer does not qualify for
the new tax credit if they purchased a home in 2008. They might qualify
for the $7,500 re-payable tax credit from 2008.

13 – A taxpayer that purchases a home
in 2009 may choose to claim this credit on their 2008 tax returns based
on which year, due to incomes, allows for the largest credit.

Finally, there is the question of how
a potential homebuyer can access the credit to use as a down payment.

We continue to check with the state housing authorities for Florida,
Texas and the Carolinas to see if there are any tax credit acceleration
loans available. At this time there is nothing available.

However, a taxpayer is permitted to reduce
their 2009 tax withholdings up to the amount of their anticipated tax
credit in order to save the down payment quicker. Oakkwood Financial can assist the
homebuyer in determining their credit amount but the final decision
must come from the taxpayer as Oakwood Financial is not in the business of providing
tax advice. Also, please caution homebuyers to consult their tax professionals.
I would do this in that there are two particular issues related to reducing
2009 withholdings.

1 – If a taxpayer reduces his/her 2009
withholdings based on the anticipated tax credit and then, for whatever
reason, the home purchase does not take place… the taxpayer may owe
a large amount of tax including possible penalty and interest charges.

2 – If a taxpayer reduces his/her 2009
withholdings based on the tax credit, they should not take this credit
on their 2008 tax return. This would provide for a reduction of their
2008 taxes but they would, just as the example discussed in number one
above, be greatly under withheld on the 2009 tax return and could owe
a large sum of tax including penalty and interest.

Again, their personal tax professional
should provide them with any detailed tax advice.

Email Me: Powermtgbroker@gmail.com

$8000 Tax Credit

Who Qualifies for the $8000 Stimulus Pkg Tax Credit