by Mary Bryan Fields
In order to create a catalyst for turning around the real estate market, the federal and state governments have approved unique tax incentives for 2009 home buyers. As the market is already turning around, with inventories shrinking and prices stabilizing, these incentives may not be extended upon expiration. This opportunity may never come again!
Federal Tax Credit:
If you purchase a home for $80,000 or more, you will receive a credit of $8,000 toward your federal income tax liability. (If the home costs less than $80,000, your credit is 10% of the purchase price.) You must purchase a principal residence (owner-occupied home) between January 1, 2009 and December 31, 2009; your income cannot exceed $75,000 single or $150,000 married filing jointly. If you have not had any ownership interest in a home in the 3 years previous to the day of your purchase, you qualify. Every dollar of the credit reduces the income tax you owe by one dollar. For example, if you owe $10,000 and you qualify for the full credit, you will only owe $2,000. If you only owed $5,000, you will receive a check for $3,000. You do not have to pay this money back. You do not have to make an application for the money; simply claim your credit on your form 1040.
Georgia Tax Credit:
All purchasers (filing a Georgia tax return) of a single family residence (including condominium residences) located in Georgia that was listed for sale prior to May 11, 2009, may claim a credit for 1.2% of the purchase price, with a maximum credit of $1,800. You may combine your state and federal credits, if you qualify for both. You must purchase the home by November 30, 2009. Your credit will be applied to three (or more) tax years, 1/3 of the full credit amount in each year. You may live in the home as your permanent residence, or you may use the credit toward a vacation/second home… even an investment property. You may claim the credit regardless of your income!
Enjoy all the advantages of owning real estate and get cash back!