Two Tax Breaks for Homeowners
Tax Day (April 15) is just around the corner and we wanted to remind you that recently enacted legislation has introduced two new great opportunities for tax savings. The first one is an $8,000 tax credit for first-time homebuyers and the second one is related to energy efficient home improvements. Below we have outlined the details.
First-Time Home Buyer Tax Credit
In 2008, the Federal Government through the Housing and Economic Recovery Act of 2008 authorized a first-time homebuyer tax credit of $7,500. The stimulus package of 2009 made some significant changes:
- Increased the tax credit to $8,000.
- No longer required to pay back the tax credit as long as you stay in your home for 3 years.
- Tax credit phases out for individuals making more than $75,000 or couple earning more than $150,000.
- Most types of primary residences qualify including mobile homes and house boats.
- Tax credit will reduce your tax liability and/or refund you money if you don't owe any taxes.
Although the tax credit did not turn out to be as much as had been hoped for, it is still a great opportunity for first-time homebuyers. For the complete details see this article-$8,000 Tax Credit for First Time Homebuyers
Tax Credits for Energy Efficient Home Improvements
Home improvement tax credits are now available for home improvements “placed in service” from January 1, 2009 through December 31, 2009. Home improvement tax credits up to $1,500 (raised from $500) are available for insulation, replacement windows, water heaters, certain high efficiency heating and cooling equipment, and biomass stoves. Also, the percent of the cost versus the project has been raised from 10% to 30%. For more information, see the Dept of Energy's Energy Star program http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
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.