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New $8,000 first-time home buyer credit - doesn't have to be paid back.
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First-time homebuyers in 2009 are getting $8,000 tax credit that they don't have to pay back! Too bad, you folks that bought your first-time home in 2008 & used the $7,500 tax credit in 2008 that does have to be paid back. At this rate, soon the taxpayers will be buying the entire house for people who can't afford to buy one themselves.
Here it is well-explained by the buiders association -hmm, wonder if they wrote the legislation?
[link to www.federalhousingtaxcredit.com]
Tracking the Changes
by Andrea Coombes
Friday, February 20, 2009provided byMarketWatch
1. Home-buyer credit
Usually, once the year ends there's not much you can do to change that year's tax bill, other than making certain retirement-plan contributions. But in 2009, first-time home buyers eligible for the new $8,000 tax credit can opt to use that credit on their 2008 return, tax experts say.
Prepare to be confused, however. Since the new $8,000 credit was signed into law in the stimulus bill this month, the 2008 tax forms won't reflect the change.
Last year, Congress enacted a $7,500 credit for first-time buyers who purchased a home after April 8, 2008 and before July 1, 2009. That credit must be repaid. If you purchased your first home in 2008 (after April 8), then that's the credit you'll take and the IRS instructions and forms will reflect the rules for that credit.
But the recent stimulus bill changed the terms of that credit for 2009. Now, first-time buyers who purchase a house from Jan. 1 through Nov. 30, 2009, are eligible for an $8,000 credit that does not need to be repaid (unless you sell the home within three years of purchase). And they can claim that perk on their 2008 return, tax experts said.
"There's the $7,500 credit from 2008 that was supposed to be good through this coming June. Even properties you bought today could have been filed under that $7,500 credit for 2008," said Martin Kamenski, a certified public accountant and president of Rockstar CPA, a Chicago-based firm.
"Now there's this newer credit with more money that you don't have to pay back, but that's nowhere mentioned in any of the instructions for the forms," he said.
"While the professional tax software we use in-house to prepare taxes gets updated and these changes get made, for anybody that's at home doing their taxes they may not even be aware that this $8,000 credit that does not have to be paid back is available to them," he said.
See this IRS page for more on the $7,500 tax credit.
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See this IRS page for more on the $7,500 tax credit.
2. Forgiven debt
People who lose their homes to foreclosure are often shocked at tax time to find that their forgiven mortgage debt is considered taxable income. But that's not the case for taxpayers who face foreclosure from 2007 through 2012.
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3. That other stimulus payment
Fully 15% of filers made a mistake related to the "recovery rebate credit," according to an IRS review of returns filed early this year. This credit is available to taxpayers who are eligible to receive additional money from the fiscal stimulus enacted by the Bush administration in 2008.
Some filers are claiming more money than they're eligible for; others are entering on their tax return the amount of the stimulus payment they received in 2008. That's wrong -- the space on the tax return is for claiming additional money.
Most people who got a stimulus payment last year won't get more money this year, the IRS said.
"The recovery rebate credit is on the tax form to help those taxpayers whose financial situation changed in 2008 and they may be due more money. For example, they may have had a child born last year. Or, someone may have been a dependent on another's tax return in 2007 but was not in 2008," said Nancy Mathis, an IRS spokeswoman, in an email interview.
4. Tax breaks that didn't expire
As you do your 2008 taxes, don't forget that some tax breaks were renewed for 2008 and 2009. Those include the deduction for state and local sales taxes (for those who don't deduct state income taxes), the expense deduction for teachers who pay out-of-pocket for classroom materials, and the tuition and fees deduction for education costs (keep in mind for next year's filing that the recent stimulus bill created a new education credit for 2009 and 2010).
5. Standard deductions on the rise
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6. Kiddie tax
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7. Withdrawing retirement savings early
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[link to finance.yahoo.com]
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