Allyce Arnold
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  $8000 Tax Credit for First Time Home Buyers

 

 
Tax Credit for First Time Home Buyers

First-time home buyers who purchase a home this year can now take advantage of the stimulus bill's $8,000 tax credit. 

Unlike the previous $7,500 credit available to this group of buyers, the credit outlined in the American Recovery and Reinvestment Act of 2009 does not have to be paid back -- if the home remains the buyer's "main home" for at least 36 months after the purchase date, according to the Internal Revenue Service's Web site. First-time buyers, for the purpose of this credit, are those who have not owned a home in three years.  

Buyers have to purchase a home before Dec. 1 to be eligible, and the credit can be claimed on a home buyer's 2008 or 2009 tax return. Tax returns for 2008 are due by April 15, but most taxpayers can get automatic extensions to Oct. 15 without citing a reason. (You must pay any estimated tax liability at the time the extension is filed.) Filing an amended 2008 return after you buy would also be an option for getting the credit sooner.

Buyers can claim 10% of the purchase price, up to $8,000, or $4,000 for married individuals filing separately, according to the IRS' Web site. The credit starts to phase out for those whose adjusted gross income exceeds $75,000, or $150,000 for joint filers.

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