If you are a first time home buyer and you haven’t been able to find your dream home yet, then you are in luck. Congress has just extended the $8,000 tax credit for first time home buyers until April 30, 2010. You have until June 30 to close on a house to still qualify for the first time home buyer tax credit. So, how exactly do you go about getting this tax credit for first time home buyers?
Getting the $8,000 tax credit for first time home buyers is actually rather easy. The tax credit is available for fist time home buyers who are buying a home that cost $800,000 or less. Home buyers can be eligible for up to an $8000 tax credit on any first home purchase that is under $800,000.
The main thing to keep in mind when trying to get a first time home buyer tax credit is that it is based on your income level. A single person may make up to $75,000 a year to be eligible for the tax credit while a married couple can bring home $150,000 a year. If you happen to make over the income limit you will not be eligible for the full $8000 but you may receive a smaller amount based on what your income level is. The closer your income is to the maximum amount, the closer your tax credit is going to be to the full $8000.
Filing for a first time home buyer credit simply involves claiming the credit on your year-end tax forms. There is nothing special that you have to do when you buy the house, as it is all processed when you do your taxes at the end of the year. Complete the IRS form 5405, which will determine how much of a tax credit that you are actually eligible for. Then, take that amount and put it into the proper box on your 1040 form. If you are unsure where to take this tax credit on your 1040 you can always consult with a certified accountant to help you. If you already have a tax preparer do your taxes each year, be sure to notify them that you need to claim this tax credit on your tax forms.
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If you don’t want to wait until the next year to get your tax credit or you need money for a down payment on your first home, you can always reduce the amount of income tax that you pay through your employer. This means that you will take home more money than you normally would, so that you don’t have to wait till you file your taxes to get the lump sum credit. Just be aware that if you reduce your income taxes too much or for too long of a period, you will have to pay the extra money back to the government when it comes time to file your taxes the next year. You can contact your employer to see how you can lower your income tax withholding.
Along with the extension of the first time home buyer tax credit, there is also a tax credit given to home owners who buy a new home and have been in their current one for at least 5 years. These home owners can qualify for up to $6500 which depends on the price of the home and their income levels.
If you are thinking about buying a new home, you may want to consider making your decision before April 30, 2010, or you may just miss out on a $8,000 tax credit for first time home buyers.
Tags:
Real Estate,
taxes