Tax Exemption Update – 2010

FIRST TIME HOME BUYER TAX CREDIT EXTENDED  - STAY TUNED! 

 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 April 30, 2010 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 May 30, 2010 or June 30, 2010 if you are in the military!                                                  

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.  Current homeowner may receive a tax credit if they upgrade during this time period and have lived in the current residence for 3 of the last 5 years.

iv. 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.

v.  The tax credit for homes purchased in 2010 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.