Here's the latest info from IRS: Notice, if you qualify, you will have the option to take the credit on your 2008 tax return, instead of waiting until next year when you file your 2009 tax return.
YES - but it was explained to me that it is more of a loan. you get the money now but it is deducted from future taxes. So if you take it now, next year you may get 500 deducted from your Federal return that you might other wise have gotten back. And that happens in the ensuing years until you pay your "tax break" back. I didn't bother
That applies to the credit that was in effect during 2008. This new credit, for homes purchased this year, is a true tax credit. Also, to qualify as a first-time homebuyer, it doesn't mean you never owned a home before, just that you have not owned a home within the 3-years ending at the time of the purchase. Sorry I can't give a link for this, I'm copying from an IRS newsletter that I get in my e-mail. The same information is available on their website, but not in exactly the same form and you'd have to search for it.
So, my wife and I live in the house that she bought before we were married, and have so for 4 years. It is in her name only right now, so technically could we buy a new house in my name, and get the credit?
Regarding the question about it being a loan, if you purchased a home during 2008 you are eligible for a $7,500 credit that must be paid back $500 per year, or pretty much an interest-free loan. If you purchase a home in 2009 by December 1, you are eligible for an $8,000 credit that does not have to be paid back, with some exceptions (like you sell the house within 3 years or convert it to a rental property). Regarding not taking the credit because it is a loan, that's kind of foolish. It might be inconvenient to have to pay back $500 each year on your tax return, but it is an interest free loan. If you put it into a savings account at just 1.85% APY compounded quarterly, and the APY never changes, and you withdrawal the $500 IRS payback each year, you would still make $1,223.11 in interest by the end of the 15 year repayment period. I'd amend my return for that.
Many folks out there do their own income taxes via software loaded onto their computer. If President Barrack Obama has given us anything, it's knowing that doing your own taxes can be complicated if you do not know all the laws and regulations: Treasury Secretary Tim Geithner. My advice to everyone who has anything more than a simple W2 to file on their tax return, should consult a tax professional. A tax professional will take the time to review everything within your particular situation and advice you as to the best way to proceed.
But make sure the person you go to really is a tax professional, the operative word being "professional."
Even then you need to be aware of the situation. I have found errors in the corporate income tax returns our accounting firm prepared. EVERYONE makes mistakes, even the best CPAs, but the professionals will have the guarantee and insurance to cover their mistakes.
Correct. I have a friend who won a cash prize in a drawing. She received a 1099 in the mail to claim the prize on taxes. I happened to see the 1099 and it was filled out incorrectly. The company who held the drawing, their CPA firm listed the prize winnings in Box #7, which most folks know is Self-Employment Income. I immediately told her to contact the company who held the drawing and demand a CORRECTED 1099 be issued reflecting the winnings in the correct box. I explained to her and her husband that the 1099 as it was prepared would require her to pay Self-Employment taxes on that winnings, in addition to the federal and state taxes.
