First-Time Home Buyer Tax Credit at a Glance

· The tax credit applies to first-time home buyers only. First time buyers mean persons who have not owned a home in the past 3 years. It also means persons whose spouses have not owned a home within the past 3 years.

· The maximum credit amount is $7,500.

· The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009.

· Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

· The tax credit works like an interest-free loan and must be repaid over a 15-year period, and in full when the home is sold.  If the home is sold with less that enough profit, the loan is forgiven.  In case of death, heirs do not have to pay the loan off.

· The tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7500. For most first time home buyers, this means the credit will equal $7500. For buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

· The tax credit is either a credit toward taxes owed, or an actual check received by the home buyer. For example, if a home buyer is a W-2 employee whose employer has withheld sufficient taxes from his/her paycheck to not incur additional tax liability, when the home buyer files their taxes and gets a refund, the homebuyer will get $7500 more than their normal refund. If insufficient taxes are withheld, for example,  and the homeowner owes $2,000 in taxes, they will receive a check for $5500.

· Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding to enable them to save money that would ordinarily be withheld from their paychecks to raise money for a down payment on a home. Buyers should adjust their withholding on their W-4 through their employer or through their quarterly estimated tax payment.

IRS Publication 919

$$$$ There are other ways to raise money for your down payment.  Please call us for suggestions and answers to any additional questions.

May Office 678-546-3040  Cell 404-392-2914

Ernie  Office 678-546-3040    Cell 678-855-1446

For a more complete list of questions and answers about the tax credit, go to:  http://www.federalhousingtaxcredit.com/faq.php