Questions & Answers about The $8,000 Tax Credit For Buying a Home
The government has allowed a tax credit for first time home buyers that buy a home before Dec. 1, 2009. Since this was announced I have had several questions about the tax credit. It is an excellent incentive for first time home buyers to buy a Cabot home or home anywhere.
Here are some common questions and answers.
Who can claim the credit? Any first time home buyer, or person that has not owned a home in three years. If you are married and you have owned a home but your wife hasn't, you can not claim the credit. Neither party of the married couple can have owned a home in the past three years.
Are there income limits? Yes. $75,000 annual pay per single tax payer, $150,000 per married couple.
Is a tax credit the same as a tax deduction? No. A tax credit is a dollar for dollar reduction in what the tax payer pays in. A tax deduction is subtracted for the amount of income that is taxed.
How do I claim the credit? Talk with your tax professional and tell them you bought a home recently. They should prepare a 5405 form to apply to your 1040 income tax return.
These a just a few questions that I have been asked about the tax credit when working with local buyers. If you have any question about the tax credit or buying a home in Cabot visit www.cabot4sale.com and send me an email.
Good day