Please keep in mind...
-Although this tax credit is referred to as an $8,000 housing tax credit, the total amount a home buyer gets is equal to 10% of the purchase price of the new house up to a maximum of $8,000. Thus, in order to get a full tax credit of $8,000 your purchased property must be above $80,000 in value.
-Home buyers with a modified gross annual income of $75,000 get the full benefit of this housing tax credit. The tax credit is gradually reduced for those with income between $75,000 to $95,000 and finally a home buyer gets no tax credit if his/her modified gross annual income is more than $95,000. For married taxpayers, the home buyer tax credit is gradually reduced to zero for modified gross annual income between $150,000 to $170,000.
-Remember that this is a tax credit and not a tax deduction. That means that qualified home buyers deduct $8,000 from their total tax owed to the IRS and not the total taxable income.
This post is linked to The Thrifty Home's 28th Penny Pinching Party.
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5 comments:
Yes, I have a couple of friends who are hoping this is the modivation to get buyers out there!
Janell
Ahhh...I can't wait to get my taxes back! = )
We qualified for that tax credit (big incentive for us to buy our "fossil"). It's the money we've been using to "freshen" the old house up, and the only way we could afford to buy a decent house, really.
Great incentive for new homebuyers. :)
thanks for clearing things up, it can get so confusing! I just turned in all of our paperwork- crossing my fingers that I crossed all the t's and dotted all my i's.
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