Did You Know ...? Home Buyer Tax Credit Extended and Expanded

Home for sale — SoldIf you’re looking for a new home, your timing is perfect. Thanks to a new law, more taxpayers are eligible for a home buyer tax credit, including those who already own homes and those with higher modified adjusted gross incomes. First-time home buyers, defined as those who haven’t owned a principal residence for three years before the purchase, can take up to $8,000 in tax credits. Existing home owners, those who have lived in one residence for five consecutive years of the past eight, are eligible for up to $6,500. Income restrictions apply. To claim the full credit, modified adjusted gross income is limited to $125,000 for single taxpayers and $225,000 for married couples filing joint returns; partial credits may be available for those with higher incomes.

A tax credit is a dollar-for-dollar reduction of any federal income taxes you owe. If you don’t pay enough taxes to offset the credit, you can get a tax refund for the difference. So for example, you owe $5,000 in taxes and are eligible for the $8,000 credit. You would get the difference — $3,000 — as a refund from the IRS.

For complete details, visit www.irs.gov or see your tax advisor. For mortgage financing, contact Allsteel Credit Union or visit our Web site at www.allsteelcu.com. But don’t dally: To be eligible for the credit, you must have a sales contract by April 30, 2010, and close the deal prior to July 1. The sale must close in order for you to get the credit.

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