Buy Now and Get an $8,000 Tax Credit - Time Running Out!

Buy Now and Get an $8,000 Tax CreditBy Deanna Lynn

With only a few more months to take advantage of the tax credit, now is the time for serious buyers to purchase a home. Until December 1, 2009, first-time homebuyers can receive a tax credit of 10% of the home's value up to a maximum of $8,000 if the sale of the home closes before the deadline.

In this buyers market of low interest rates and an abundance of homes for sale at affordable prices, the extra incentive of the tax credit gives first-time homebuyers the chance of securing the home of their dreams at a price they can afford.

What homes qualify?
Buyers who haven't owned a principal residence home in three years can qualify for the tax credit. Any home purchase qualifies, including single-family homes, townhouses, condominiums, manufactured homes and houseboats. Qualifying homes may be an existing home, new home or a home the owner contracted to build. Those who own a vacation home or rental homes that are not their principal residence are also eligible for the tax credit if they buy a principal residence.

Are there income restrictions?
Income limitations of $75,000 for single taxpayers and $150,000 for married taxpayers who file a joint return apply to this tax credit. However, taxpayers who earn slightly more than the limits can apply for a reduced tax credit.

Is it difficult to claim the tax credit?
Claiming the tax credit is easy. When filing your 2009 income tax return simply complete IRS Form 5405 and then enter the amount from the bottom of that form on line 67 of Form 1040. The tax credit will be deducted from the income taxes you owe. If you do not owe any taxes, you will receive a refund check for the full amount of your tax credit.

What if I need the tax credit immediately?
For homebuyers who wish to collect or use their anticipated tax credit before filing their 2009 taxes there are some alternate options available. Buyers can adjust their tax withholding amount on their W-4 through their employer so fewer taxes are taken out of their paycheck. This will allow them more money in pocket for the remainder of the year. Buyers purchasing through the Department of Housing and Urban Development (HUD) or a Federal Housing Authority (FHA) approved loan can get a short-term loan for their anticipated tax credit to use for closing costs or as a portion of the down payment. Buy now and take advantage of this tax credit. It is the perfect way to afford a home you might otherwise have not been able to purchase.