15k 2009 tax credit for new purchases?

[jribe]

Wow. Did everyone hear about the senate approving a 15k tax credit (or 10% of purchase price) for homes bought in 2009?

I know it's not final yet- but now i'm thinking it kinda sucks to be filing right now...

No tax credits for most of us... But for those that haven't filed and still have decent ficos- it's going to be a pretty good deal if you can get a decently priced house...

[DisneyGirl]

None of those really impact us. We bought in Jan 08. I think the dates were between April 08 - June 09. Best of luck to those who can utilize it.

[jribe]

None of those really impact us. We bought in Jan 08. I think the dates were between April 08 - June 09. Best of luck to those who can utilize it.

They haven't passed the 15k one yet, but it will supercede the 7500 from earlier in the year... And it's supposed to be for all of 2009

[moneytree]

Hope I am right (I just posted about this on the ch7 forum)

And that it replaces the $7500 going back from Apr 08 and changes it to $15K, and then instead of ending on 7/1/09, that it would continue for all of 2009as well. Very nervous as we closed on our home in Nov. 08.

The $ will be set aside in the emergency fund. Praying...

--and I heard today that it won't need to be paid back!

Anyone have updates?

[imaloser]

maybe maybe not..

this comes straight from the irs.gov website - this is a "loan" which is paid back, intereset free. now, this is for the 7500.00 credit - the irs.gov website has not been updated for the 15 grand credit buzz.


Congress recently approved a tax credit for first-time homebuyers that can be worth up to $7,500. The credit, however, acts more like a no-interest loan because it must be repaid to the government over 15 years.

The First-Time Homebuyer Credit can be claimed on Form 5405, which is filed with your 2008 or 2009 federal tax return.
IRS Notice 2009-12 has instructions for non-married persons who co-own a house and want to take the credit.
For the who, what and how, listen to an IRS audio interview on the first-time homebuyer credit and take a look at the following questions and answers:

Q: What is the credit?

A: The First Time Homebuyer Credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. The credit operates like an interest free loan because it must be repaid over a 15-year period.
Q: How much is the credit?

A: The credit is 10 percent of the purchase of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing a joint return; $3,750 for married persons filing separate returns. The full credit is available for homes costing $75,000 or more.

Q. Which home purchases qualify for the first-time homebuyer credit?

A. Only the purchase of a main home located in the United States qualifies. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.

Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit. If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return.

Q: When must I pay back the credit?

A: You must begin repaying the loan the second year after claiming the credit. For example, if you properly claim the maximum available credit of $7,500 on your 2008 federal tax return, you must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on your 2010 federal tax return. Normally, $500 will be due each year from 2010 to 2024.

Q. How is the credit repaid?

A. The first-time homebuyer credit is similar to a 15-year interest-free loan. It is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.

[moneytree]

check out this discussion forum...(re: $15K tax credit)

http://www.fivecentnickel.com/2009/02/04/15000-homebuyer-tax-credit/#comments

[justbroke]

I don't know if I'm the first to say this, or not... but... what if Banks aren't lending.

[movingon]

This is my take of it from reading...only my opinion, since I'm not a tax expert.

This Home Buyer Tax Credit only assists the folks who have a large tax liability...it's a tax credit, not a "here you go folks, a check for $15K".

Let's say I paid $4000 in federal taxes in 2009; then I'm able to get back that $4000. If I paid 15K in taxes in 2009, I'm able to get back 15K. The only people who will be able to take advantage of the full amount will be people who are taxed over $7500 a year (being able to use this for two years). Hence, only people with high incomes will be able to take advantage of the entire credit.

Could be wrong, but that is my interpretation. This will not be a "buy a home, I send you $15000 check in the mail" program. I hope lower income folks won't buy a home thinking they'll have 15K to aide them in their purchase...

[2ndChanceTx]

For a single, no dependants - I think it takes in the neighborhood of 57-59K year in W2 income to get to a high enough tax braket to use all of the credit in two years, assuming the interest and property taxes are deductable in the second year.

If you are single, no dependants and your W2 wages were ~82,600 then you would get the full credit.

These are just rough calculations.

[mand15]

the 15K tax credit didn't pass, but they did pass a $8K tax credit (not a deduction) and you won't need to repay it....which is a good thing. still for first time homebuyers and certain restrictions apply.

[justbroke]

the 15K tax credit didn't pass, but they did pass a $8K tax credit (not a deduction) and you won't need to repay it....which is a good thing. still for first time homebuyers and certain restrictions apply.

Which means it's only $500 more than the one previously passed under the prior administration. They are throwing pennies at the problem, if you ask me.

[Flamingo]

In our Sunday paper Business section today, front page "New Home Buyers - Read That Fine Print."