Catch a [Tax] Break On Mt Hood as a First Time Homebuyer!

There’s good news for first-time homebuyers who plan to purchase a home in 2009. Thanks to some of the provisions in the recently enacted American Recovery and Reinvestment Act of 2009, qualifying first-time homebuyers can earn a tax credit of up to $8,000 if they purchase a home before Dec. 1. They can claim the credit on either their 2008 or 2009 tax returns, according to the Internal Revenue Service. The best news is that the credit does not need to be repaid provided the home remains their main residence for 36 months after the purchase date. Buyers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately. The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

 

For purposes of this credit, you are considered to be a first-time homebuyer if you (and your spouse if you are married) did not own any other primary residence during the three-year period ending on the date of the purchase.

 

The new law does not affect individuals who purchased a home between April 8, 2008 and Dec. 31, 2008. For these homeowners, the maximum credit remains 10 percent of the purchase price up to $7,500 for individuals, or $3,750 for married individuals filing separately. In addition, the credit for these purchases must be repaid in 15 equal installments over 15 years, beginning in 2010.

 

For more information about the tax credit or to find out how the new legislation affects homeowners, visit www.irs.gov or consult your tax accountant.