First Time Home Buyers Tax Credit [creditdiagnosis.blogspot.com]

First Time Home Buyers Tax Credit [creditdiagnosis.blogspot.com]

Beware the first home buyers' grant - it's a poisoned chalice The NSW government has retooled its stimulus for first home buyers, offering them $ 15000 towards new homes plus no stamp duty for buyers of new homes costing less than $ 650000. The new regime ... Otherwise, their money - and the government's, which is ... Read more on The Age

Bought your first home in 2011? Did you buy a home to accommodate a person with a disability? The Government of Canada can help you save on your taxes. Learn more about the First-Time Home Buyers' Credit and if it applies to you. For more information, visit www.cra.gc.ca Video Rating: 5 / 5

A federal housing tax credit is available to first-time home buyers. Home purchases made between January 1, 2009 and December 1, 2009 qualify for the credit. The "purchase date" is the date when closing occurs. For purposes of the tax credit, a "first-time home buyer" is a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers each spouse must satisfy the three year rule in order to qualify for the credit.

The credit is equal to 10% of the home's purchase price up to a maximum of $ 8,000. There are certain income levels that apply in order to claim the credit - $ 75,000 modified adjusted gross income for single taxpayers and $ 150,000 for married couples filing a joint return. Above these income limits, the credit is reduced and phases out completely at $ 95,000 and $ 170,000 for single and married taxpayers, respectively.

This a refundable tax credit.

If the amount of the credit is greater than the amount of tax owed, the excess will be received in the form of a refund. In addition, home buyers must live in the home as a principal residence for at least three years otherwise some of the credit must be recaptured (paid back to the IRS).

The credit applies to both new and resale home purchases. In addition, the Office of Housing and Urban Development (HUD) has announced that home buyers may apply their anticipated tax credit towards their home purchase immediately rather than waiting until they file their 2009 tax return to receive a refund. This will allow the first-time home buyers to use the funds for down payment or closing costs.

If you are a first-time home buyer, low housing prices coupled with the first-time home buyer tax credit makes this an excellent time to purchase that first home.

For more information on the tax credit, go to http://www.irs.gov/.

Find More First Time Home Buyers Tax Credit Articles

Question by : I filed the new home purchase tax credit and for the first time recieved a CP05. Is that normal? I filed the $ 8,000 tax credit for purchasing a new home on my '08 return. I recieved a cp05. It says that I will get my return or be contacted in the next 3 weeks. Did this happen to many people who filed for this? Is this the first step in being audited? Best answer for I filed the new home purchase tax credit and for the first time recieved a CP05. Is that normal?:

Answer by Judy
The IRS is verifying many claims for the credit, since many people are applying for it fraudulently. It's sort of an audit - they might ask for a copy of the paperwork from your closing.

[tax credit first home purchase]