$ 8,000 Tax Credit Is Still Going Strong!

Well kids, you still have time to get one of the greatest gift from Uncle Sam! A new Senate proposal will offer a first time home buyer an $8,000.00 tax credit. This program has been widely popular, and this is probably the final extension. You can take advantage of this up to April, as long as you are under contract by April 30, 2010. The former deadline was November 30, 2009 – but the program has proven so popular that the government has kept things around for a few more months…. Single taxpayers with incomes of up to $125,000 and married couples with incomes up to $225,000 are eligible to receive the full tax credit.

Current Charlotte Homeowners looking for a replacement primary residence can also qualify for a $6,500 (up to $3,250 for a married individual filing separately) under the new “long-time resident” provision. They must have lived in the same principal residence for a five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased. (Shew!) This new provision also only applies to homes purchased after Nov. 6th 2009.

The IRS has stepped up compliance checks involving the home buyer credit for those with past homes and they must provide a mortgage Interest Statement, Property tax records or Homeowner’s insurance records, to prove compliance with past residency criteria.

To get into the fine print – if you plan on claiming the new home buyer credi… For qualifying purchases, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. A new version of Form 5405, First-Time Home buyer Credit, is now available on the IRS website. Taxpayers claiming the credit on their 2009 returns, will not be able to file electronically because of the added documentation requirements, but instead will need to file a paper return by using the new version of Form 5405. A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.

Want more information about the Mint Hill, Matthews and Charlotte area real estate market?
Check out www.minthillrealty.com

Tax Credit for First Time Home Buyers

As part of the American Recovery and Reinvestment Act of 2009, a.k.a. the Stimulus Bill or ARRA, first time home owners are now eligible for a tax credit of $8,000. This credit, alongside some fabulous opportunities in the market, makes it an incredibly keen time to buy. Homes in Mint Hill and Matthews are still showing excellent resale value, so buying now when the market is accommodating is a key. The staff of Jamison Realty has spent time looking over the ARRA, and has all the answers for the consumer.

The following list summarizes the eligibility requirements of this credit:

When – Home owners who purchase their house between January 1, 2009 and December 1, 2009 are eligible for the credit.

Who – The law states that the credit is available to first time home buyers. However, the law is a bit more flexible and allows anyone who has not owned a home for three years to qualify. For example, if you sold your home on May 24, 2006, you will have to close on your new home subsequent to May 24, 2009 to qualify. The closing date in this situation would make a significant difference on your wallet. It certainly makes purchasing a home in beautiful Mint Hill, NC a stunning investment!

How – You will receive the tax credit when you file your individual tax return. As part of this filing, you will need to complete Form 5405 which determines the amount of credit you will receive. The credit can be claimed on either your 2008 or 2009 tax return. If you already filed your 2008 tax return, you can amend the return to obtain the credit. And…you can buy up to the end of 2008 and still ask for the amendment. For example, say after months of looking you and your realtor finally find a home in Matthews, NC. By the time you have gone to closing with your new piece of Matthews' real estate, it is nearly Christmas. That is no problem, the ARRA bill provides for that and you can amend your 2009 return and receive the cash back. Or, you simply file it on 2009!

What – Everyone should understand that this is a credit to the tax payer, not a deduction. A tax credit is a dollar for dollar benefit to the tax payer. So a first time home buyer should be $8,000 wealthier as a result of this credit. A deduction merely decreases your taxable income. Furthermore, this tax credit does not have to be repaid to the government like the “credit” available to first time home buyers in 2008. If you have questions, the staff at Jamison Realty can provide the answers.

And - The credit shall be equal to 10% of the purchase price of the home, not to exceed $8,000. Since the median home and condominium price in Charlotte, North Carolina is significantly more than $80,000, most will receive the full $8,000 credit.

Also - Single taxpayers with incomes up to $75,000 and couples with income of up to $150,000 qualify for the full credit.


It's a great time to buy!
Rich Ferretti

Want more information about the Charlotte area real estate market? Check out www.minthillrealty,com

How the New Stimulus Package Can Help You Purchase Your First Home

If you are considering the purchase of a first home or have not owned a primary residence in three years or more, the American Recovery and Investment Act could help your dreams of home ownership come true.

The stimulus package provides a credit of 10% of the home purchase price, up to a maximum of $8,000 for those who purchase a home between January 1, 2009 and December 1, 2009. The credit may be taken on either your 2008 or 2009 tax filing, does not require repayment, and works to reduce your tax liability.

If the closing on your home takes place after April 15, but you want to take the credit on your 2008 taxes, you would have to have filed for an extension, but as long as the closing takes place prior to October 15, you can claim the credit by that extension cut off date.

Already filed your return for 2008, and don’t want to wait until 2009 to take the credit? You can still claim it by filing an amendment to your return with IRS Form 1040X.

If you plan to take the credit for 2009, you can either claim it on your 2009 taxes or adjust your withholdings to reflect the credit.

You will be eligible to take the full credit if your income is under $75,000 if filing individually, or $150,000 if filing jointly. As your income rises, the percentage of credit drops. Once you hit an income of $95,000 filing individually or $170,000 filing jointly, you are no longer eligible to take the credit.

For more information on this stimulus package, visit The National Association of Realtors.

Want more information about the Charlotte area real estate market? Check out www.richferretti.com