Tax Exemption Update – 2009

FIRST TIME HOME BUYER TAX CREDIT MAY BE EXTENDED  - STAY TUNED!  The bill has been passed by both the House and the Senate as of 11-04-09.  If President Obama signs the bill, not only will the credit be extended until May 1, 2010, but it will provide a tax credit for current home owners wishing to purchase a new primary residence!  Keep in touch for more on this great advantage for home buyers!

1. NOTE:  Below is current as of 11-1-09, but the bill is in the process of being changed:

 First Time Home Buyer Credit.  This new incentive was created to enable buyers who have never owned or who have not owned a home in the past three years, to purchase a home and receive a tax credit. 

a. Home must be purchased between January 1, 2009 and December 1, 2009 in order to qualify for a tax credit equal to 10% of the purchase price of the home up to $8,000.00    Buyers MUST close on the home by Dec 1, 2009!!                                                  

i. Credit phases out with income between $150,00 and $170,000 married filers; $75,000-$95,000 single filers.

           ii. If the home is no longer your primary residence the balance of the credit must be repaid in that tax year.

iii. The credit is paid through your tax return – so it does not help your cash flow when you close on your new home.  Decreasing withholding on the IRS Form W4 would allow the buyer to see an increase in take-home pay, enabling the buyer to free up money which could be saved for a down payment or closing costs - just keep the Dec 1, 2009 purchase deadline in mind.

iv.  The tax credit for homes purchased in 2009 do not have to be re-paid.  2008 purchases must be repaid.

2.   Taxes will continue to change with the new administration so the best advice is to stay in contact with a professional tax advisor throughout the year to ensure you stay on top of things you can do to meet requirements and stay in compliance with tax laws.

 

Otter Creek tumbles over the rocks in front of the Doe Run Inn and Restaurant in Brandenburg, KY.