Private Advisory Group

Homebuyer Tax Credit – Good, Better, Best

Posted by Private Advisory Group on March 15, 2010

As congress has struggled to find a solution to fix a weak housing economy some say that the answer lies in giving new home-buyer tax credits. Since July of 2008 congress has given homebuyers an opportunity to apply for this tax credit and it will also be true for 2010. This time around the tax credit will be extended to more affluent homeowners whose tax rates lay in higher income thresholds.  Ida Yarbrough, a CPA in Los Angeles California said, “The additional features create an incredible synergistic effect for new homeowners.” Also in an attempt to free up the credit crunch congress has postponed the deadlines and given breathing room to those who are trying to finance a mortgage.

The third round of tax credits will be slightly different than those in 2009. First of all, all those single taxpayers who annual income is less than $175,000 can now apply for the tax credit. This is up $50,000 from last year where the cap was only $125,000. And if you are filing your taxes joint with a spouse those limits will be raised from $150,000 to $225,000. Second, the tax credit is now available for taxpayers who haven’t owned a home for less than three years. The rule for 2010 is if a taxpayer has lived in a home for the past five consecutive years during the last eight the taxpayer is now eligible for a $6,500 tax credit as well. Lastly, if you are planning to purchase or have purchased a home that is over the sale price of $800,000 the taxpayer is not eligible for the tax credit. Also the time and income limits will be the same for the current version of the $8,000 credit. However, as of right now this taxpayer credit will not last the entire duration of 2010. The credit is most likely to end in June of this year.

If you are a parent or grandparent and you would like to help your loved ones on their first time home buying experience they can claim the advantages of this tax credit. If you have extended a loan to your youngsters who are at least 18 years or older, and claimed as a dependent; they can buy a home and use the tax credit.

ref: www.financial-planning.com