Repeated New Home Buyer Tax Credit

The first-time homebuyer and repeat buyer tax credits expire on April 30. As of this moment, there doesn’t seem to be a movement to extend these credits again in California.

Common myths related to the tax credits are,

If deals haven’t completely closed by April 30 as long as you sign a binding sales contract by April 30, you have until June 30 to complete the transaction and qualify for either the $8,000 first-time homebuyer or $6,500 repeat buyer tax credits.

Receiving new home buyer tax credit check is even if you buy a home in 2010, you can claim the first-time homebuyer or repeat buyer credit on your 2009 return. If you haven’t yet filed your 2009 return, great. If you did, you’ll need to file an amended return. Otherwise, you can wait until you file your 2010 taxes.

In most cases, the government doesn’t issue you a check. Instead, every dollar of the tax credit reduces your income taxes by a dollar. So if your total tax liability was $10,000, the $8,000 tax credit would bring your total tax liability down to $2,000.

So when does someone receive a check? If your total tax liability was $5,000, the IRS would send a qualifying first-time homebuyer a check for $3,000 the difference between the $8,000 tax credit and the buyer’s $5,000 tax liability.

Eligible for the tax credits is for the home you buy has to be your principal residence. And it has to have cost no more than $800,000. There are also exclusions based on your modified adjusted gross income. For example: If your modified adjusted gross income is $145,000 or more, or $245,000 and up if married and filing jointly, and you bought your home after Nov. 6, 2009, you can’t claim either the first-time homebuyer or the repeat buyer tax credit.