The Federal Tax Credits Blog

Posts Tagged ‘credit’

Question: 1st time home buyers credit as a down payment?

Ok. Ive read on numerous news websites that HUD is going to allow first time homebuyers to use the credit that they were going to recieve after purchasing a house as a downpayment instead..

http://www.digtriad.com/money/your_money/article.aspx?storyid=124351&catid=248

http://rismedia.com/2009-05-16/hud-action-allows-home-buyers-to-use-8000-tax-credit-for-downpayments-on-fha-insured-loans/

but then i read on two diffrent websites that the idea has been recsinded and scrapped.

http://www.boston.com/realestate/news/blogs/renow/2009/05/not_so_soon.html

SO MY QUESTION IS, WHICH IS IT? Is this going to come into fruition or should i continue to keep saving every red cent i recieve???

Answer: A tough question in deed. I just bought my first house (about 2 weeks ago). I spoke with my CPA and he said that we could file our 2008 taxes and claim the credit – even before we closed on the house but that it wouldn’t be entirely ethical, so, we didn’t. We have since closed on the house and we need to amend our 2008 taxes in order for the government to recognize that we purchased the house and then they should send it.

My mortgage banker on the other hand swore up and down that we could get the credit before closing to apply it towards our downpayment, but I wouldn’t trust her over my CPA.

In my opinion, you should absolutley be able to use that money towards the downpayment, but unfortuantely I don’t think you can.

203k Rehab Loan – New York FHA Loan to Renovate and Improve Property Owners’ House, Condo, or a Mixed Use Property

Great Northern Mortgage Corp., a correspondent lender approved by the Federal Housing Administration, offers assistance to apply for a New York FHA loan that allows to receive one low interest mortgage to finance improvements in your house, condo, or a mixed use property.

What can you do with the $8000 Tax Credit?

Question: can i receive a greater refund than federal taxes paid if i claim the hope tax credit?

Last year i claimed the Hope Tax Credit and i believe i received an excess of a refund compared to federal taxes paid. This year, i graduated nursing school and would like to claim the Hope Tax Credit for the Second year. That would mean I earned $9152 as a full time student and paid $333 to federal withholdings. Will I receive more than $333 back with this credit? Thanks!!!!

Answer: No, the college tax credits (Hope and Lifetime Learning) are not ‘refundable’ tax credits. This tax credit will only wipe out any income tax liability you have to the Federal government. You will only get your $333 back.

In your case, if you are single and you are claiming yourself (and nobody else), then most of your income is already not taxed. If you did not claim the Education Tax Credit but rather claimed this as “Tuition and Fees Deduction” (Line 34 on form 1040), you may be better off because your adjusted gross income will be low enough that you will get all of your $333 back, plus it can increase your state refund. Most (if not all) states that have an income tax determine your taxable income by using your adjusted gross income (line 38 on form 1040).

If you claim the Hope Credit, then your adjusted gross income would be $9,152. The Feds will not tax the first $8,750 ($5,350 std deduction, $3,400 exemption). That means only $402 is taxable. The Hope Credit would probably wipe out that tax owe. You would get your $333 back. But your state income tax would be charged with $9,152 adjusted gross income.

If you claim the deduction (and not Hope credit), then you Gross adjusted income would be $9,152 – minus what you paid in tuition (the deduction is capped at $4,000). The $5,350 std deduction would wipe out any taxable income, so you would get yoyr $333 back. But when you do your state taxes, you will taxed with an Adjusted Gross Income of only $5,152. Doing this will give you the same federal refund, but may help your state refund.

Try it both ways and see which works best for you.

Film backers sue for state tax rebate

Get FREE Daily Headlines by email! The financiers of Love Ranch , a film about Nevada’s first legal brothel, are suing the New Mexico Taxation and Revenue Department, claiming they have been wrongfully denied a state tax rebate.

What Should You Do With Your Tax Refund?

Question: How do I file the line of credit payment on my business tax return?

We paid off a line of credit loan from some of our business income last year. Where do I record this in my business tax return? FYI, it is an S Corporation.

Thanks.

Answer: You expense the interest that you paid. Principal paid is not a deductible expense, it just reduces your liabilities.

Local economic forecast for 2010: Dark clouds, with a hint of silver lining

Chronicle file photo In 2010, the community will consider the future use of the former Sappi Fine Paper Mill on Muskegon Lake. A new owner for the 120-acre site could emerge before the end of the year, officials say.

7 23 09 Pomeroy statement on Short Line RR tax credit

Question: Will i receive the 8,000 tax credit if i buy a foreclosed home?

I am looking around for houses right now and I am willing to spend about 100k on a house..Most of the houses I am looking at are foreclosed and I was wondering if i receive the 8,000 tax credit if i buy the foreclosed home. I have never owned a house or property in my life. If someone can give me more details about this tax credit and the eligibility i would greatly appreciate it. Thank you
Also does it matter if i buy it with a loan or cash?
One last thing i wanted to know is how will i receive this 8000 credit? What form does it come in?

Answer: Yes as long as you qualify as a first time buyer, with an income of less than 125,000 / year, it doesnt matter how you purchase the home. You need not have a mortgage, merely a closed transaction with a deed of ownwership.
It is a tax credit. Which means your total US income tax will be reduced by that amount due in 2010 on your 2009 taxes.

Panel backs only some reforms on private-school tuition law

A panel of lawmakers on Thursday rejected some of the toughest recommendations for increased oversight of Arizona’s private-school scholarship program but did propose new controls in an effort to curtail abuses in the tax-credit law.

1st Time Home Buyer Tax Credit Explained

Question: Was the half a billion in fraud the basis for why Obama decided to extend the 1st time home buyer credit?

Together, fake or faulty claims for the $8,000 refundable tax credit may have cost the government up to half a billion dollars so far, investigators told the Ways and Means subcommittee.

http://www.politicsdaily.com/2009/10/22/four-year-old-got-first-time-homebuyer-tax-credit-panel-told/

Russell George, an inspector general with the Treasury Department, told the subcommittee about the most brazen instances of bogus claims that he had come across since the IRS created a filtering system last May to weed out suspicious applications.

George said he had found nearly 20,000 returns for people who may not have actually purchased homes; thousands for people who already owned homes; 3,200 taxpayers who could not prove they were in the country legally; and an unspecified number of IRS employees wrongly applying for the credit.

Answer: According to Obam Fraud= Good.

Wall St Week Ahead: New year, old worries for U.S. stocks

By Edward Krudy

First time home buyer tax credit