$8000 TAX CREDIT

If you are reading this for the first time you may be spending too much time at the movies -- Big News for some -- there is a $8,000 credit to some buyer's in 2009.

I say some people because it is for people who have not owned a home with in the last three years. There are a bunch of other rules on it too which is fine we have to have rules. ($75,000 income limit per head, owner occupied 3 years).

A tax credit is more valuable than a tax deduction because A credit reduces dollar for dollar the amount of tax you owe, where as a deduction allows the tax payer to exclude some taxable dollars.

The tax credit is better than last years because it doesn't have to be paid back. It is a true tax credit, but here is the deal.

To buy a home buyers still need to have a job, a good credit rating, and some money for a down payment. If you have all of those things then you will be rewarded by being able to purchase a home and will get the tax credit on top of that" party dance time".

My take on it is that if you are in a position to buy a home and were planning on doing so the tax credit is a good thing. If you cannot afford to buy a home because your income is not high enough, your credit rating is not good enough or you don't have any money then the tax credit isn't going to have any impact on your situation what so ever.

There are some other programs for first time home buyers that may help: Oregon Bond, FHA.

I am offering a first time buyer class on March 25Th from 6-8pm. I offer one every other month and it is free. There will be a lender, escrow agent and myself at the class to answer your questions. 8 people per class -- contact me today to reserve a spot.

FREE MONEY

Does money grow on trees? Well still the answer is NO - but the government is giving it away this year and next if you are a first time buyer or have not purchased in the last three years and do not own a home.

Here's some great information regarding the $8,000 Federal tax credit.

This website is very informative. The main question I'm fielding is if people need to wait to get the credit until after they have bought a home.

No, clients do NOT need to wait to buy a home. They can file their tax return now and get the $8K tax credit on their 2008 tax returns BEFORE buying a home. They can then use the funds for down payment (there are no restrictions on what the tax credit is used for). Some folks may just hold on the credit for rainy day funds.

http://www.federalhousingtaxcredit.com/:

Question: If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

(information provided by Jeff LaViolette [JeffL@equityhome.com] - preferred lender with Equity Home Mortgage).