Although
all U.S.
citizens who
file taxes are
eligible to
participate in
this program,
there are income
limits. Buyers
who file as
single or
head-of-household
may claim the
full $7,500
credit if their
adjusted gross
income is less
than $75,000
annually. For
married couples
filing a joint
return, the
income limit is
doubled to
$150,000
annually. The
credit is not
available to
single taxpayers
whose adjusted
gross income
exceeds $95,000
and married
couples that
exceed
$170,000.
This tax credit
is also
refundable,
which means that
if you have to
pay less than
$7,500 in
federal income
tax, then the
government will
write you a
check for the
difference. For
example, if you
owe $6,000 in
federal income
taxes, you would
pay nothing to
the IRS and
receive a check
for $1,500 from
the government.
And if you are
due to receive a
$500 income tax
refund, your
refund would
increase to
$8,000 ($500
plus your tax
credit from the
home buyer tax
credit).
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Social
Security
and
Pension
Income
is
Simply
Not
Enough.
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Home buyers
can take the tax
credit on their
2008 or 2009 tax
return. If the
home was
purchased in
2008, the tax
credit can be
taken on your
2008 tax
return. If you
buy your home in
2009, you have
the option of
taking the
credit on your
2008 (if
purchased before
April 15th)
or 2009 tax
return.
All homes types will
qualify, whether
single-family,
newly-constructed,
condominium or town
home, provided that you
are using the home as
your primary residence.
Contact your tax
professional for more
details.
Recently, the Internal
Revenue Service
announced that there may
be unclaimed economic
stimulus payments to
more than 5 million
retirees and disabled
people. The people in
these groups typically
are not required to file
a tax return because
they make too little
money and/or most of
their income is not
taxable. Therefore,
it’s difficult to
determine who is
entitled and who is
not.
If you received at least
$3,000 in earned income,
including social
security and disability
benefits, veteran’s
disability, survivor or
pension benefits, tier
1” railroad retirement
benefits, or nontaxable
combat pay you may be
entitled to a payment
this year of economic
stimulus of up to $300
or more.
If you recently receive
this IRS packet in the
mail it’s because you
haven’t filed a return,
but you should do so
because you’re probably
entitled to stimulus
payment. It’s not
necessary to hire an
accountant or fill out a
long tax form. You can
simply complete the 2
page IRS FORM 1040A. If
you’re filing solely to
get the stimulus payment
it only requires
completing a few lines,
including your name,
address, social security
number, filing status,
personal exemptions and
the source of your
qualifying income. All
previously mentioned
income is qualifying
income, except
supplemental social
security income.
If you’re not sure of
the exact amount of your
qualifying income
because you never filed
a return, you can
estimate the amount by
multiplying your current
monthly benefit by the
number of months you
received it in that
calendar year. For
example, if you get $250
a month and received
this all year, you’d
multiply $250 by 12 and
report $3,000 of income
on line 7 of the 1040A
form. Veteran’s and
social security benefits
should go on line 14a,
combat pay goes on Line
40b.
You can choose to have a
check sent directly to
you or direct deposited
into your bank account
by providing your
account number and your
bank’s routing number.
Make sure you sign and
date your return before
the deadline of Oct 15,
2008. For further
assistance you can
contact the IRS at
800-906-9887.
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