Tax Refund Tax Credit
Question: When you buy a house you are suppose to get a tax credit can anyone explain this to me?
I have heard when you buy a house this year you get a tax credit of $7500 back on your Tax Refund. Is this true? If not does buying a house help you on your taxes?
Answer: Yes, it is true…..sort of.
If you buy a house before 7/1/09, you can receive a credit of 10% of the purchase price of the house up to $7500. This is a refundable credit meaning that it would increase your refund by $7500.
The bad news is that it is really just an interest free loan. You must pay it back in your future tax returns at a rate of $500 per year for 15 years starting with your 2010 return. If you sell the house before 15, the balance of the $7500 is due on the next tax return.
Outside of this new credit, buying a house is generally a good investment. Mortgage interest and property taxes paid are a tax deduction so yes, buying a house generally reduces your tax liability. However it is not the HUGE tax windfall that some people (real estate agents and mortgage brokers) make it out to be. They will promise you absolutely anything if it gets you to closing.
Your family may qualify for free VITA tax help
You could owe less in taxes and get cash back from the IRS. The Earned Income Tax Credit (EITC) is a federal tax benefit for working people with low or moderate incomes. It can offset some or all of the taxes workers must pay and can help cover any federal income tax workers may still owe at tax time. You may also get cash back through an EITC refund. The EITC can be worth up to $5,567 for …
Home Buyer Tax Credit Update, Use $ for Down Payment
