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Answers (24)
- zastro
- Contributions:12
If I'm not mistaken, the 8000 tax credit cannot be used towards a down-payment but can be applied towards closing costs as Mike Emery has pointed out below. If your lender allows for this, they usually will allow for a bridge loan, interest free if its paid within the next calendar year, once you've received the said refund. It's best to inquire with your tax consultant.
There were some states down south that had started this program before it was enacted nation wide.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
It surely should. File your taxes on Jan.3 and enjoy your big refund.
- Dorothy Whitaker, "Avatar321"
- Contributions:9
Thank you ALL very much! We can only "HOPE" this plans works!!! Thank you all again for sharing the wonderful information.
Dorothy
Dorothy
- NTETS, "Mr Caveat"
- Contributions:6436
this time, i am right too... you and everyone else will pay roughly 18,000 per credit issued to fund this 8,000 credit... making a far, far cry from being free.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
The new version of the credit, the $8K that Dorothy asks about, is a free lunch. It does not have to be repaid unless you violate the three years as primamry residence requirement.
Below is the [palin English explanation from IRS.gov. Bold added so that we are clear for Dorothy's benefit.
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. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
Unfortunately for those of you that it bugs, Vivianne now has this figured out. She is right.
Below is the [palin English explanation from IRS.gov. Bold added so that we are clear for Dorothy's benefit.
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. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
Unfortunately for those of you that it bugs, Vivianne now has this figured out. She is right.
- NTETS, "Mr Caveat"
- Contributions:6436
maybe not at the rate of 500 per year, but there should be no mistake:
there is no free lunch
there is no free lunch
- Vivianne Rutkowski, "VivianneRutkowski"
- Contributions:925
Eric,
The $7,500 credit that applies to transactions closed by December 31, 2008 must be repaid.
The $8,000 tax credit does NOT have to be repaid if the purchased home is a primary residence for at least three years.
If the home is held LESS than three years, than credit must be repaid from the sale proceeds.
The $8,000 tax credit is a true credit and is applied agains tax liability (vs. income). If the tax liability is less than $8,000, IRS refunds the difference by sending a check.
NOTE: For details contact a tax accountant.
The $7,500 credit that applies to transactions closed by December 31, 2008 must be repaid.
The $8,000 tax credit does NOT have to be repaid if the purchased home is a primary residence for at least three years.
If the home is held LESS than three years, than credit must be repaid from the sale proceeds.
The $8,000 tax credit is a true credit and is applied agains tax liability (vs. income). If the tax liability is less than $8,000, IRS refunds the difference by sending a check.
NOTE: For details contact a tax accountant.
- Eric Abrams, "Ericmabrams"
- Contributions:89
Keep in mind that the $8k tax credit is an $8k zero-percent-loan. It is not free, whatsoever, and you will repay it each tax year to the tune of $500 per year.
This is rarely mentioned, and I did not see it mentioned by anyone below.
You must repay it within 15 years, starting 2 years after you've taken out the credit (loan).
This is rarely mentioned, and I did not see it mentioned by anyone below.
You must repay it within 15 years, starting 2 years after you've taken out the credit (loan).
- Hamp Yonce, "Zilluminati"
- Contributions:3463
If y'all start singing Karaoke, I'm closing my tab and leaving.
- Tiffany Bond, "TiffanyBond"
- Contributions:3010
Viv seems to think she is an accountant. Actually, that would be pretty helpful. Anyone know an accountant we can pull in to post on this?
- Michael Emery, "MikeEmery"
- Contributions:7298
Wow, talk about TMI.
The 5405 form can ONLY be used if you are filing an amended 2008 return.
If you hold out and file the tax credit in 2010 there will be a NEW 5405 form. This form should be available sometime after January 1 2010. The current form found online will NOT work for filing your 2009 taxes. However for informational purposes the form should be essentially the same.
The 5405 form can ONLY be used if you are filing an amended 2008 return.
If you hold out and file the tax credit in 2010 there will be a NEW 5405 form. This form should be available sometime after January 1 2010. The current form found online will NOT work for filing your 2009 taxes. However for informational purposes the form should be essentially the same.
- Vivianne Rutkowski, "VivianneRutkowski"
- Contributions:925
Dorothy,
Here is IRS Form 5405 - it will give you some idea what the credit is about. I hope you find it helpful:
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Here is IRS Form 5405 - it will give you some idea what the credit is about. I hope you find it helpful:
http://www.irs.gov/pub/irs-pdf/f5405.pdf
- Hamp Yonce, "Zilluminati"
- Contributions:3463
What?
Dorothy
This is a bottom line refundable tax credit. It has nothing to do with closing costs or down payment. As Clay and others have said.
This is an additional $8K Federal tax refund. Qualify as 1st time buyer. Get additional cash from Uncle Sam. Simple.
Dorothy
This is a bottom line refundable tax credit. It has nothing to do with closing costs or down payment. As Clay and others have said.
This is an additional $8K Federal tax refund. Qualify as 1st time buyer. Get additional cash from Uncle Sam. Simple.
- NTETS, "Mr Caveat"
- Contributions:6436
Q. I don't owe taxes and/or my income is exempt from tax and I do not have a filing requirement. Do I qualify for the credit?
A. The credit is fully refundable and, if you qualify as a first-time homebuyer, having tax-exempt income will not preclude eligibility. Although there are maximum income limits for qualifying first-time homebuyers, there are no minimum income criteria. Thus, someone with no taxable income who qualifies as a first-time homebuyer may file for the sole purpose of claiming the credit for a refund.
if that is the case then i am positive it changed over the last year, but look at this, i have found the related article AND will refrain from posting the same bad info in the future... isnt that something!
oh, vivianne, i didn't see you there!
A. The credit is fully refundable and, if you qualify as a first-time homebuyer, having tax-exempt income will not preclude eligibility. Although there are maximum income limits for qualifying first-time homebuyers, there are no minimum income criteria. Thus, someone with no taxable income who qualifies as a first-time homebuyer may file for the sole purpose of claiming the credit for a refund.
if that is the case then i am positive it changed over the last year, but look at this, i have found the related article AND will refrain from posting the same bad info in the future... isnt that something!
oh, vivianne, i didn't see you there!
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Read the link to IRS. It is refundable.
- Michael Emery, "MikeEmery"
- Contributions:7298
Actually if your tax debt for the year is less than 8k the IRS will send you a check for the balance of your tax credit.
For instance if your tax debt for the year was 2k and you received the maximum tax credit of 8k, the IRS would give you a check for 6k. If you owe outstanding balances for child support or unpaid taxes etc, the IRS reserves the right to keep your tax credit.
For instance if your tax debt for the year was 2k and you received the maximum tax credit of 8k, the IRS would give you a check for 6k. If you owe outstanding balances for child support or unpaid taxes etc, the IRS reserves the right to keep your tax credit.
- NTETS, "Mr Caveat"
- Contributions:6436
hmm, i'll have to look into that
im pretty sure you had to split it over 2 tax years, if you bought in 2009. i know the 7500 was refundable
im pretty sure you had to split it over 2 tax years, if you bought in 2009. i know the 7500 was refundable
- Vivianne Rutkowski, "VivianneRutkowski"
- Contributions:925
Dorothy,
Homes below $80,000 receive direct tax credit of 10%,
and homes above $80,000 are credited flat $8,000 regardless of price, provided that all conditions are met.
Homes below $80,000 receive direct tax credit of 10%,
and homes above $80,000 are credited flat $8,000 regardless of price, provided that all conditions are met.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
I think it is a refundable tax credit.
- NTETS, "Mr Caveat"
- Contributions:6436
also if you lose the home within the first 3 years, you have to give it back and it is a non refundable credit, meaning you only get 8k back if you actually paid 8k in taxes
- Clay Branch, "Georgia Loans"
- Contributions:7836
Right, I agree with both of those other posts. FYI, if you were doing a VA or USDA loan with no down payment and paying 0 in closing costs, you still get the tax credit if you dont exceed the income limits and 1st time homebuyer.
- Michael Emery, "MikeEmery"
- Contributions:7298
The tax credit is for 10 percent of the sale price of the house with the maximum you can receive capped at $8,000. If you purchase a $50,000 house you would receive $5,000. If you purchased a $200,000 house you would receive the maximum of $8,000.
As Clay succinctly points out this has nothing to do with closing costs. However there were some states that were allowing you to borrow against your tax credit to help pay for closing costs. It's a loan that would have to be paid back once your received your tax credit. BUT this is on a state by state basis and is not available everywhere.
There are a ton of qualifiers so contact a tax preparer familiar with the program to ensure that you qualify.
Here's the link for more information.
http://www.irs.gov/newsroom/article/0,,id=206291,00.html
As Clay succinctly points out this has nothing to do with closing costs. However there were some states that were allowing you to borrow against your tax credit to help pay for closing costs. It's a loan that would have to be paid back once your received your tax credit. BUT this is on a state by state basis and is not available everywhere.
There are a ton of qualifiers so contact a tax preparer familiar with the program to ensure that you qualify.
Here's the link for more information.
http://www.irs.gov/newsroom/article/0,,id=206291,00.html
- Joe Harris, "Joe Harris"
- Contributions:48
The First time home buyer tax credit program is simple, however, if you have any questions, you may want to check with your accountant or CPA. You can also check on the IRS's Website. However, here is an outline of the program:
· Must be first time homebuyer - That means you haven't owned a home in the past three years, and your spouse hasn't either if you're married.
· Purchase home before December 1st 2009 · File an amended return on your 2008 tax return, or wait to file on your 2009 tax return
· The credit is for 10% of the purchase price, up to $8000
· The credit amount starts phasing out if you make more than $75,000 or $150,000 if you're filing a joint return.
· Enjoy the benefit of an $8000 tax credit.
In some areas, programs have been set up to allow buyers to borrow against the tax credit, and use the amount for help on their closing costs and Down payment. You can see the whole blog here.
· Must be first time homebuyer - That means you haven't owned a home in the past three years, and your spouse hasn't either if you're married.
· Purchase home before December 1st 2009 · File an amended return on your 2008 tax return, or wait to file on your 2009 tax return
· The credit is for 10% of the purchase price, up to $8000
· The credit amount starts phasing out if you make more than $75,000 or $150,000 if you're filing a joint return.
· Enjoy the benefit of an $8000 tax credit.
In some areas, programs have been set up to allow buyers to borrow against the tax credit, and use the amount for help on their closing costs and Down payment. You can see the whole blog here.
- Clay Branch, "Georgia Loans"
- Contributions:7836
the tax credit has nothing to do with closing costs or down payment
Is the $8k (1 tm hme B) credit - only UP TO $8k in closing cost and/or dwnpymnt - or just FLAT $8k?
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