Just a reminder that the federal Home Buyer Tax Credit remains in force until the end of this month. It expires on April 30, 2010.
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.