First Time Homebuyer Tax Credit

Summer is definitely upon us! Along with the heat, summertime is historically a busy time for families to move. Things are starting to heat up in the real estate market again we’re getting plenty of inquiries about the First Time Homebuyer’s Tax Credit. This tax credit is an excellent opportunity for anyone seeking home ownership, but there is a time limit on it. If you or anyone you know is looking to take advantage of a buyer’s market, low interest rates AND a huge tax credit, YOU MUST ACT QUICKLY!

Here are some basic facts about this tax credit:

Dollar Amounts of the Homebuyer Tax Credit
The tax credit is worth 10% of the purchase price of the home. For 2009, the maximum credit is $8,000 (or $4,000 for married couples filing separately).

Qualifying as a First-Time Homebuyer
For the purpose of this tax credit, a first-time homebuyer is defined as someone who has not owned a primary residence in the three-year period ending on the date of purchasing the home. Married couples are considered first-time buyers if neither spouse has owned a residence in the previous three years.

Limited Time Period for Purchasing a Residence
The credit has a very limited life-span. Individuals will need to purchase a residence after April 9, 2008, and before December 1, 2009.

What is a Primary Residence?
A primary residence is a residence in which an individual lives most of the time. A primary residence can be a house, condominium, co-operative apartment, houseboat, or mobile home. Because the tax credit is for people who purchase their primary residence, individuals may qualify for the tax credit even if they own a vacation home or rental property as long as those properties were not their primary residence for at least three years preceding the purchase of their new home.

Income Phase-out Range
The credit is phased out for individuals with modified adjusted gross income between $75,000 and $95,000. For married couples filing a joint return, the phase out range is $150,000 to $170,000.

When to Claim the Credit
The taxpayer can claim the tax credit on his/her next tax return in January, 2010. The IRS will also allow the purchasers to file an amended 2008 return to claim the credit, if they want the cash sooner.

E-File Florida is uniquely positioned to help taxpayers/homebuyers through the maze of purchasing their new home and applying for the First Time Homebuyer’s Credit. We are licensed in real estate as well as income taxes! Feel free to call or email us with any questions you or anyone you refer may have. We are here to serve YOU!

You can contact E-File Florida at 954-583-8534 or visit us on the Internet at http://www.efileflorida.com for more great tax tips and articles.

IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).