Do not wait to buy your first home as the first time home buyers stimulus is only valid for this year.
In President Barack Obama's' Economic recovery plan, he has allotted $8,000 tax credit for anyone to purchase their first house during the 2009 year.
This credit will be available in the 2009 tax year and this means that when you file your taxes next year for this year you get an $8,000 credit.
Do not confuse this credit with a deduction.
When you receive a deduction, your overall taxable income is reduced $8,000.
So if you make $40,000 your taxable income would be reduced to $32,000.
This is not the case with this stimulus.
A tax credit, which is this year's incentive, is like a child care credit, it does not reduce your overall taxable income.
It adds to the amount you paid to the government like your federal withholding.
So if you get paid $40,000 a year in income, and say this year you owe $2500 in federal taxes, you take the $2500 out of the $8,000 and you get a $5500 refund! If you are owed a refund for 2009 of $1000, this first time home buyer credit adds to your refund and now your refund will be $9,000 and you receive that just like you do your regular refund.
What a great short term perk for buying your first house! Of course when you become a first time home buyer you will learn that a lot of what you pay for in conjunction with your home is tax deductible.
Which will lower the overall tax liability year after year.
This is a win situation for the first time home buyer.
Considering all the foreclosures available at great prices, purchasing a home is a very wise move and will make your good fortune carry into next year when you receive your $8,000 stimulus in your tax refund.
Also taking place are short sales where a property sells for less than what is owed on the property and the resident cannot afford to keep the home.
Rather than let the home go into foreclosure, a lender might allow a home to sell under the loan price to make sure they get the majority of the money owed on the home.
Whether you buy a foreclosure, a short sale, or the home of your dreams, now is the time to take advantage of the First Time Home Buyers Stimulus program.
In President Barack Obama's' Economic recovery plan, he has allotted $8,000 tax credit for anyone to purchase their first house during the 2009 year.
This credit will be available in the 2009 tax year and this means that when you file your taxes next year for this year you get an $8,000 credit.
Do not confuse this credit with a deduction.
When you receive a deduction, your overall taxable income is reduced $8,000.
So if you make $40,000 your taxable income would be reduced to $32,000.
This is not the case with this stimulus.
A tax credit, which is this year's incentive, is like a child care credit, it does not reduce your overall taxable income.
It adds to the amount you paid to the government like your federal withholding.
So if you get paid $40,000 a year in income, and say this year you owe $2500 in federal taxes, you take the $2500 out of the $8,000 and you get a $5500 refund! If you are owed a refund for 2009 of $1000, this first time home buyer credit adds to your refund and now your refund will be $9,000 and you receive that just like you do your regular refund.
What a great short term perk for buying your first house! Of course when you become a first time home buyer you will learn that a lot of what you pay for in conjunction with your home is tax deductible.
Which will lower the overall tax liability year after year.
This is a win situation for the first time home buyer.
Considering all the foreclosures available at great prices, purchasing a home is a very wise move and will make your good fortune carry into next year when you receive your $8,000 stimulus in your tax refund.
Also taking place are short sales where a property sells for less than what is owed on the property and the resident cannot afford to keep the home.
Rather than let the home go into foreclosure, a lender might allow a home to sell under the loan price to make sure they get the majority of the money owed on the home.
Whether you buy a foreclosure, a short sale, or the home of your dreams, now is the time to take advantage of the First Time Home Buyers Stimulus program.
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