Here are some of the requirements for the first time home buyers credit:
* The tax credit is available for first-time home buyers only.
* The maximum credit amount is $7,500.
* The credit is available for homes purchased on or after April 9, 2008 and before
July 1, 2009.
* Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
* The tax credit works like an interest-free loan and must be repaid over a 15-year period.
If you'd like to access it before filing your current tax return, you are permitted to reduce your income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable you to accumulate cash by raising your take home pay. Make sense? This money can then be applied to the down payment. You can adjust your withholding amount on your W-4 via your employer or through your quarterly estimated tax payment. However, I am NOT a tax professional so please check with yours for the guidelines and any possible ramifications.
If you would like, the law allows that you can elect to regard your home purchase in 2009 as if your purchase occurred on December 31, 2008. This means that the 2008 income limit applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns).
Happy to help,
The Hayley Group, Keller Williams