A few newsworthy tax extensions

By: Tina Stern

President Obama recently extended the popular tax credit program offering up to $8,000 for qualified first-time homebuyers (FTHBs) into the first half of 2010.  The extention also offers up to $6,500 in tax credits for qualified repeat home buyers which allows for more qualified homebuyers to take advantage of this valuable opportunity at a time when mortgage rates hover at historic lows.

As for First-Time Buyers, basic rules remain similar with one important exception – higher income limits are now in place, increasing the pool of potential buyers eligible for the tax credit of up to 10% of the purchase price or up to $8,000. Amazingly, this is money does not have to be repaid if stay in your new home for at least 36 months.

Single tax filers who earn up to $125,000 are now eligible for the total credit amount. Those who earn more than this cap (but less than $145,000) can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap (but less than $245,000) can receive a partial credit.

The new homebuyer program offers a new tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. This gives those who already own a qualifying residence some additional reasons to take advantage of lower home prices and interest rates and finally move up to the home of their dreams.

Important Deadlines
Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.

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