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First Time Homebuyer Credit
This credit has generated a lot of questions, mostly because it has changed 3 times since last year. If you bought your first main home after April 8, 2008, and before December 31, 2008, the maximum credit is $7,500 but must be repaid over a period of 15 years. If you bought your first home between January 1,
2009 and June 30, 2010 (enters into contract by April 30,
2010 and closes by June 30, 2010) the maximum credit is $8,000 and does not have to be repaid. The new law
also provides a “longtime resident” credit of up to $6,500 for buyers who have owned their previous home 5+ years. Returns with either of these credits must have the
HUD Settlement Statement attached for approval.
New Car Deduction
Purchasers of new vehicles from February 17, 2009 to December 31, 2009 can claim state and local sales taxes or excise taxes paid on the purchase as an above-the-line deduction. Please bring the dealership invoice to claim this credit.
Real Estate Tax Deduction
If you pay real estate taxes but do not itemize your deductions, the amount paid can be added to your standard deduction up to $500.
This means that anyone that pays real estate taxes should bring proof of your payment to make sure you take full advantage of this deduction.
Education Credits just got better
The HOPE education credit got more than just a new name when it was changed to the American Opportunity Tax Credit. It
now covers the first four years of college and adds course materials as qualifying expenses. The maximum credit increased from $1,800 to $2,500 with up to 40% being refundable. This means the credit would still apply, even if you have no tax liability.
