Answering your questions about the complicated Obama 2009 stimulus bill. Find out what is in the bill for you and how to get it.
Who qualifies for the first-time home buyer $8,000 tax credit?
A first-time homebuyer is defined as someone who has not owned a primary residence for at least a 3 year period prior to the purchase of a home. In the case of a married couple, neither one of them can have owned a primary residence for three years to qualify as first-time homebuyers. However, ownership of a vacation home, rental home, or any home not used as a primary residence will not disqualify you. Be sure to consult your tax advisor to determine if you qualify.
I only owe $2,000 in income tax, how will the first-time homebuyer tax credit help me?
Because the $8,000 tax credit is considered a "refundable tax credit", not only does the $8,000 figure go towards reducing your taxes, it will also provide you a refund up to $8,000 over the amount you owe. Thus, it can really help towards making a down-payment on your first home because you will receive a check for the amount above what you owe in taxes. Thus, if you owe $2,000 in taxes you will receive a check for $6,000. If you have no tax obligation, you will receive a check for $8,000.
Do I have to pay back the tax credit?
No, the stimulus plan of 2009 not only increased the tax credit amount to $8,000 it also deleted the requirement to pay back the tax credit as long as you stay in your home for 3 years. For the complete details see this article-$8,000 Tax Credit for First Time Homebuyers
I just bought a house, can I claim the deduction for my 2008 taxes?
Yes, first-time homebuyers who purchase a home in 2009 before December 1 2009, have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 2008, or on their 2009 tax returns next year. So, as usual consult your accountant as to which option is best for you.
I am a widow living alone on Social Security, is there anything in this bill for me?
Yes, for those who are retired and not eligible for the "making work pay credit", the stimulus bill provides a one-time payment of $250. The checks are supposed to be sent out to recipients by mid-June.
I bought a new car on January 16, 2009, can I deduct the sales tax I paid from my federal income tax this year?
Unfortunately no, the new-car buyer tax deduction only applies to new cars, light trucks, recreational vehicles or motorcycles purchased on or after the day the legislation became law and throughout the rest of 2009. Thus, since the bill was signed on February 17 2009, that is effective date.
I just got laid off and I heard that my unemployment checks will be tax free from the federal government?
In 2009, the first $2,400 of unemployment benefits will be free from federal income tax. Right now it is only for 2009, but stay tuned because if things get worse this amount could be increased or extended into next year.
This article contains general information. Individual financial situations are unique; please, consult your financial advisor or tax attorney before utilizing any of the information contained in this article.
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- Stimulus Plan 2009-What's In it For You
- 2009 Economic Stimulus Package Explained
- 2009 Economic Stimulus Plans-A Glossary of Terms
- Executive Summary of the 2009 Economic Stimulus Plan
- $8,000 Tax Credit for First Time Homebuyers
- Saving and Managing Your Money During a Recession
- First Time Homebuyers Guide
- Financial Assistance for First Time Homebuyers