Colorado Nesties
Dear Community,

Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.

If you have questions about this, please email [email protected]

Thank you.

Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.

Buying a house tax credit ?

So my sister is looking into buying her first home. She met with a broker today to see what she qualifies for and she asked him about this tax credit. He said that she literally gets back the $8000 as a tax refund....does that seem odd to anyone else? I thought it would be like a tax credit towards your income or something....I'm curious if anyone knows for sure. I don't want her to get to excited that she will potentailly get her down payment back.

On a side note - I'm moving to Omaha! She is looking at houses that are $100k and less....if only things were that cheap here! And if only I hadn't bought a condo and DH & I could go buy now and get that tax credit. Oh well...

Re: Buying a house tax credit ?

  • Yes, it's true. $8k. Free. I am grateful for what they offer for first time home buyers in 2008 which is $7500 0% interest-free loan for 15 years. Basically, we'll pay back $500/year for 15 years on our taxes, unless we sell our home, then you pay it all back at once.

    What a difference a year makes! 8 grand for free! Wish it were me!

    Eric and Amanda 9.1.07
    image
    Pregnancy Ticker
  • It's a tax credit, meaning that it will lower her Adjusted Gross Income, therefore, lowering the taxes she will pay and possibly get a refund.  Here is the info from the IRS:

    http://www.irs.gov/newsroom/article/0,,id=205416,00.html

    image Baby Birthday Ticker Ticker

  • I thought it was a refund of $8k outright, not that it will lower the AGI, but I could be wrong. Calling it a credit definitely suggests that it lowers your AGI, but everything I have read sounds like you get up to an $8k refund.

    http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm?postversion=2009021712


  • It is a credit against TAX.  It is not an outright check for $8,000. 

    If you owe taxes it will reduce what you owe.  If you get a refund, it will increase your refund.  

    Melissa ~ DS Ladik
    image image image
  • It is literally 8K in your pocket.  After you calculate all your AGI, taxable income, go through credits, deductions, exemptions, etc...then you add $8000 to your "Total tax paid" box.  So for instance if you had $10,000 withheld from your paychecks, your total tax owed is $9500, then you were a first time homebuyer from January 1, 2009 to December 1, 2009, you add the $8000 to the $10,000 for a "Total Tax Paid" of $18,000, subtract the $9500 you actually owe, then you get a refund of $8500.  There are income restrictions and the credit is 10% of the purchase price up to $8000.
    Baby Birthday Ticker Ticker
  • image HuskerLissa:

    It is a credit against TAX.  It is not an outright check for $8,000. 

    If you owe taxes it will reduce what you owe.  If you get a refund, it will increase your refund.  

     

    I think this is correct.  A deduction lowers your AGI.  A credit is setoff against your tax liability.  If the credit exceeds your total tax liability, then you get $$ in your pocket.  The only way you would get the entire $8000 would be if you are already getting a refund, or if you did not owe any taxes.

  • In our case since we were both witholding as single for most of the year we had slightly overpaid which is why we got the whole thing back.  On the flip side of my example, if you owed $10,000 and paid in $9500, then were eligible for the $8000 credit, then you'd get back $7500.
    Baby Birthday Ticker Ticker
Sign In or Register to comment.
Choose Another Board
Search Boards