First-time home buyer tax credit info an $8K Gift
First-time home buyer tax credit
Right now, an $8,000 tax credit is being offered by the government to enable aspiring homeowners to buy their first home. Even if you pay no taxes the government will give you the $8000.00.
If you are eligible, the tax credit can help ease the financial transition from renting to owning. It can assist with buying furniture and home-décor; making home improvements - like remodeling, landscaping and painting; or paying down debt as you adjust to new monthly expenses. Homes purchased between January 1, 2009 and December 1, 2009 are eligible.
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The tax credit is part of the American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009, and enacted to help stabilize the housing market and strengthen our overall economy.
Are you eligible for the tax credit?
The tax credit is designated for first-time home buyers.2 A first-time home buyer is defined as a buyer who has not owned a home in the last three years.
The tax credit is equal to ten percent of the home purchase price, which is capped at $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Single taxpayers with incomes between $75,000 and $95,000, and married couples with incomes between $150,000 and $170,000 qualify for partial credit.
All homes purchased between January 1, 2009 and December 1, 2009 including single-family, townhomes, or condominiums will qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009.
For further information about eligibility requirements and limitations, visit www.irs.gov .
There is a very limited amount of money for down payment assistance if you need. Please call me for details.
Richard Lecinski
Long Realty
520-834-4663
http://rlecinski.longrealty.com
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama's plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That's because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
The Economic Stimulus Plan is huge, and impacts a number of industries. I've highlighted some of the major provisions that may impact you now and in the future.
As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.
Richard Lecinski
Long Realty Company
520-834-4663
My Virtual Home finder http://rlecinski.longrealty.com
Real Estate Tips For Seniors (edit/delete)
Real Estate Tips for Seniors
Richard Lecinski - Long Realty
Oro Valley - Tucson Arizona
Because this is an important and life changing decision, do not just pick a real estate agent out of the phone book, and/or stick with the first agent you meet - interview at least two agents. Make sure that you feel comfortable with the agent you will be working with. In the interview question the agents about their experience in handling clients dealing with the issues that you are dealing with. Try to get a sense of whether or not the agent would be sensitive to your needs; and make sure the agent is willing to deal with other family members if necessary. When selecting an agent, discuss the percentages that the agent will charge you for selling your property. If an agent tells you he/she is charging you a "standard" percentage rate for services, be weary, this is false. A percentage rate is negotiable by federal law. The length of the contract in which you list with the agent is negotiable as well. Pick a real estate agent who is willing to show you a marketing plan. A solid marketing plan demonstrates a commitment and willingness that will be instrumental in selling your property in a timely manner, eliminating unnecessary expenses related to utilities, real estate taxes, interest expense and lost interest income. A marketing plan should include advertising in a variety of venues, (for example flyers, the newspaper, open houses, the Internet). The property should always be listed in the local MLS, which is the industry standard publication that is utilized by all agents. Although a real estate agent is not a financial advisor, attorney or tax consultant, a good agent should possess basic knowledge in these matters. The agent should possess enough knowledge to let you know which expert you need to consult with should any issues or questions arise related to those topics.
Following these guidelines will go a long way towards creating a positive experience when buying or selling property. As an older American you deserve peace of mind during this time of transition.
Email: rlecinski@longrealty.com
Search for retirement communities on my web site. Just click on my Quick Links.
http://rlecinski.longrealty.com
Direct Line 520-834-4663
Finding a real estate agent who understands the unique needs of older Americans is a crucial component in having a successful real estate transaction. Life changing events such as the passing of a loved one, illness, downsizing, and/or retirement are a unique set of issues that often accompany the buying and selling of property for older Americans.
First-time home buyer tax credit
Right now, an $8,000 tax credit is being offered by the government to enable aspiring homeowners to buy their first home.1
If you are eligible, the tax credit can help ease the financial transition from renting to owning. It can assist with buying furniture and home-décor; making home improvements - like remodeling, landscaping and painting; or paying down debt as you adjust to new monthly expenses. Homes purchased between January 1, 2009 and December 1, 2009 are eligible.
The tax credit is part of the American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009, and enacted to help stabilize the housing market and strengthen our overall economy.
Are you eligible for the tax credit?
The tax credit is designated for first-time home buyers.2 A first-time home buyer is defined as a buyer who has not owned a home in the last three years.
The tax credit is equal to ten percent of the home purchase price, which is capped at $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Single taxpayers with incomes between $75,000 and $95,000, and married couples with incomes between $150,000 and $170,000 qualify for partial credit.
All homes purchased between January 1, 2009 and December 1, 2009 including single-family, townhomes, or condominiums will qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009.
To learn more about obtaining the tax credit and repayment, visit the Frequently Asked Questions.
For further information about eligibility requirements and limitations, visit www.irs.gov.
Please feel free to call anytime with questions you may have.
Richard Lecinski
Long Realty Company
Tucson - Oro Valley - Marana Arizona
520-834-4663
TUCSON
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Richard Lecinski
Long Realty Company
Tucson - Oro Valley
520-834-4663
http://rlecinski.longrealty.com
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Real estate services in the Oro Valley, Greater Tucson, Vail and Marana areas. I work with a team and we can cover much of Southern Arizona including Rio Rico and Nogales. My phone is always on.
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