These Tax Credits Won’t Last Forever!!

With February coming to an end, many people and agents almost forgotten about the extended Homebuyer Tax Credit. The clock is winding down for homebuyers to purchase a home and file for tax savings to their 2009 income taxes. Buyers must enter into a contract by April 30,2010 and close escrow by June 30, 2010. To add to confusion, homebuyers need to know which tax credit they qualify for:

1. Original Homebuyer tax credit

* Bought a home from January 1, 2009 – November 6, 2009
* Purchased home is your primary residence, not for investment or vacation purposes
* Have not purchased a home three years prior
* Individual income not to exceed $75,000, joint not to exceed $150,000
* up to 10% of the purchase price of the home that cannot exceed $8,000

2. Extended Homebuyer tax credit

* Bought a home from November 7, 2009 – April 30, 2010
* Can be a first homebuyer or current homeowner (lived in primary residence for 5 consecutive years of the last 8 years)
* First homebuyers can receive a maximum credit of $8,000 or 10% the purchase price
* Repeat homebuyer can receive a maximum credit of $6,500
* Individual income not to exceed $125,000; joint not to exceed $225,000

Additionally, homebuyers will need a fully executed HUD-1 statement and a IRS Form 5405. It is highly advised that homebuyers speak with a tax professional to ensure they meet all the requirements and have the proper documentation to file for the credit.

Not only do homebuyers qualify for a tax credit, they might qualify for the Consumer Energy Efficiency tax credit. This credit allows consumers to buy some Energy Star products, such as windows, doors, water heaters, heating, air conditioning, to make their home more energy efficient while also upgrading their home. On top of the tax credit, some Energy Star products also have rebates! The energy appliance rebate program vary from state to state. Californians will not be eligible until April, 2010. To learn more, www.energystar.gov

The clock is winding down. These tax credit advantages won’t be around forever. What are you waiting for? Act now so you won’t have to compete with more buyers as the deadline approaches!!!

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