Home Buyer Tax Credits

Tax Credit for Home Buyers. Congress has extended the home buyer tax credit until June 30, 2010. This credit is up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers. This means — if you are a first time home buyer, or have lived in your current home for more than five years and your adjusted household income doesn't exceed $125,000 if you file taxes singly, $225,000 if you are married filing jointly — you can claim the credit as soon as you close on a qualifying house. Visit www.federalhousingtaxcredit.com/ for frequently asked questions and useful links for potential buyers.

Things to know:

1. The home buyer tax credit can be applied toward houses, condos, manufactured homes and even house boats. However, the property must be your primary residence, which the IRS defines as "where you live most of the time."

2. The purchase price of the new home cannot exceed $800,000.

3.The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500 for repeat home buyers or $8,000 for first time home buyers.

3. The home buyer credit was extended for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010. 

4. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

5. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $6,500 in income taxes and who receives an $6,500 tax credit would owe nothing to the IRS.

For more detailed information on he federal home buyer tax credit go to www.federalhousingtaxcredit.com. In addition, there have been informative articles about the tax credit programs in the Arizona Daily Star. Please feel free to contact us if you would like to learn more about these programs and if you qualify.

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