The moot questions being asked by a lot of Americans who are facing the hardships in the most stoic and becoming manner is whether they qualify for the federal announced 8000 Home Buyer Tax Credit.
Here I am going to lay down the rules for this stimulus backed tax credit and what you have to keep in mind when making a house purchase for the first time.
Do I qualify for the 8000 first time homebuyer credit
So who exactly qualifies as a first-time homebuyer to enable this 8000 dollar tax credit? Lets go over the definition. A â€œfirst-time homebuyerâ€ is a person who has never owned a house in the past three years.
Additionally, here is another sticky wicket. If you purchase a house, get the tax break but don’t end up living in the house, then you have to pay every dime of the 8000 dollar tax credit back to the government. As rightly guessed, this credit is intended for people who live in their own houses, and not the house flippers or speculators.
For more details on the stimulus backed Tax Credits, check out this page on Stimulus Check Schedule.
What is a refundable tax credit? When tax professionals and the IRS talk about â€œrefundable tax credits,â€ they do not mean that you have to pay the credit back to the government. A refundable 8000 dollar tax credit means that if you owe less tax than the total amount of the tax credit, you will get a refund â€” even if you have no other tax liability for 2008. Thatâ€™s not a bad deal. In other words, if you have to give $200 to the federal government before you can take the credit, and you qualify for $8,000 for the first-time home buyer credit, rather than paying the government, you will receive a check for $7,800. Even if you had no income in 2008, owed no tax, and purchased a qualifying house in 2009, the government will send you a check for $8,000.
What if I bought the house last year? If you purchased a house in 2008 and were a first-time buyer, you qualify for the older refundable tax credit with a maximum of $7,500.