HR 3548 more than a Tax Credit of $6500.

November 15, 2009

HR 3548 more than a Tax Credit of $6500.

New home owners still have the chance to get that little pot of gold out there from Ucle Sam. The $8000 first-time home buyers credit will be extended until on or before June 30, 2010 with a Purchase and Sale Agreement in hand by April 30, 2010. You lucky dogs which can take advantage of this. However, if your home closes after November 30, 2009 do not expect to get a tax credit amended on your 2008 income tax return. You like everyone else will now have to wait until your 2009 income tax return is filed.

This might be good for taxpayers who in 2008 may not have qualified for the credit and been disappointed and not purchased a home. But the annual income limits have risen to $125,000 for individuals and for joint filers the amount has gone up to $225,000 for qualifying for the full credit. But another twist in your favor if you have a slightly higher income level is that the qualifying levels phase out completely at the individual in the $145,000 level and a couple the phase out level is at the $245,000 level.

So if you are above those levels individually but have a sweetheart get the matrymonial ceremony in place by the end of the year. Then again, maybe it might be better not to. Maybe the split level where one would qualify slightly and the other one would not qualify or maybe would qualify completely. You will have to do the math on this one. Or email me and maybe I could figure it out for you.

A one year extension for the military if you as a member of the Armed Services have served outside of the United state for a minimum of 90 days during the January 1, 2009 to May 1, 2010 period.

Include your HUD statement with your Form 1040 or 1040X amended return.

Sorry but you know must be 18 years of age to get this gig.

That second home or vacation home does not count. This must be your primary residence.

First time homebuyers may be eligible for an $8,000 refundable tax credit and other homebuyers who have lived in their current residence for five of the last eight years may qualify for a $6,500 refundable tax credit.

For other restrictions see H.R. 3548 The Worker, Hoemownership and Business Assistance Act of 2009.

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This new residence for former home owners credit may help in you getting what you need and what the economy needs far more than the first-time home ownership credit did.

Prior homeownership usually means you are stable and might have some cash to throw around. Need new drapes. No problem. New rug. No Problem. Check book has the money from the old house. etc. etc. What is really happening here is the government is trying to have you loosen your checking account to stimulate the economy and notably for the benefit of the construction and durable goods industry.

But I would like you to completely fool the IRS. Do buy improvements for your home but make sure they pass the energy star test. Keep in mind you have a limitation of $500 for some of the home improvements and a $1500 limitation on others. Higher limits for specialized solar power should be looked at. But do not dispare the limitations are annual and you can do another project in the next year for another $500 etc. You really should consult your accountant or tax advisor for more specific information on these improvements since they are as I call them “simplistically complex”. The energy star information for your stoves and refrigerators is given to the manufacturer but a credit is given for your heater if replaced and an energy star. The lowest cost is also the best. A tedious task of caulking around the siding gives immense returns. If affording new drapes is out of the question at least buy a caulking gun and “drape” your house to shut the heat from escaping and the heat from coming inside. Loosen up your house once in awhile by opening the doors though for circulation. You can get a tax credit besides for the cost of caulk. Your labor does not count.

The actual next best way would be to invest in some solar panels or some type of wind power. Check with your local taxing district and other authorities first. You may have to get a permit before installation or construction. Also check with your local utility. You may have to get a check from them for producing electricity for them. There are specific requirements which all utilities have and not following them would mean you may be missing out on your rebate check. For instance, you may have to buy a meter to help in determining how much is going back out onto the grid. Some utility companies may have different rates for different hours of the day and you will definitely want to take advantage of these as well. Do not forget to consider your state income tax as an additional credit source. All states vary on this issue. From none for most of the states without a state income tax for substantial amounts. Depending upon your income you may need to know if the credit is available for you as a refundable or is it a non-refundable credit. Also, if you are temporarily in a state or seasonally will you get the credit. All of these considerations are important. What you should not do is guess that you need this done and assume you will get a credit. It is a function of responsibility on your part to assess all aspects of the taxes concerning improvements and solar with your tax advisor before any purchases are made. It is really a “simplistically complex” credit.

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