2008 federal property tax deduction

2008 federal property tax deduction

Tax credit for home buyers

The new reports good news for many buyers of the first time of purchasing a home between April 9, 2008 and July 1, 2009. These homebuyers may be eligible for a tax credit under a new bill was signed by the law and should be signed by President Bush. The tax credit is $ 7,500 or 10% of the purchase price of the house is smaller. It is the creation of an enthusiasm for many potential buyers of the first hour the, however, a shadow looms over the excitement.

Initially looking at the tax bill seems to be a bargain. A tax credit is more valuable than the tax credit is a dollar reduction in tax dollars. In addition, the bill credit is refundable that benefits the taxpayers whose federal taxes are less than $ 7,500. For example, a taxpayer has $ 2,000 in taxes will still receive $ 5,500 and a archive that receives a tax refund of $ 2,000 will receive a refund of $ 9,500. This is not happening a few catches though, they include:

* Pay Back: Although labeled tax credit is a loan without interest. A buyer of a first home, you claim the credit must be paid in installments over 15 years. The repayments will commence in the second year after home is purchased. A house bought in 2008 and will return an additional $ 500 per year in taxes from 2010 and continuing for 15 years. If house is sold before 15 years, the balance is due at the end unless the house is sold at a loss.

* Income Limits: There are no income limits to qualify for the tax credit. Gross adjusted at least $ 75,000 for single or head of household taxpayers can receive a mixed credit, while he will not receive partial credit if AGI is between 75,000 $ And $ 95,000. Adjusted gross income below $ 150,000 for married filing together, are eligible for a mixed credit, then they will partial credit if your AGI is between $ 150,000 and $ 170,000.

In addition, the legislation that allows homeowners do not itemize to deduct up to $ 500 in property taxes each year for single or head of household taxpayers up to $ 1,000 for married filing joint. Set flyers who pay property taxes in 2008 be eligible for a lump sum deduction of up to $ 11,900 and will be the sole owner eligible to receive up to $ 5.950.

Naturally, the amount of the deduction of property taxes must not exceed the amount actually paid in property taxes. For example, a single applicant who paid $ 400 in property taxes will be allowed to deduct $ 400. In addition, unless the votes in Congress to extend the property tax deduction is limited to the year 2008.

About the Author

J Stromsteen has many years expertise in the finance, real estate, and insurance industry. She contributes to various websites such as First Time Home Buyer where you can find today's mortgage rates as well as a wealth of information on getting a First Time Home Buyers Loan .

Senate Session 2010-04-20 (10:49:40-11:45:08)

 

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2008 federal property tax deduction

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