It’s no secret that our present economic situation as some here in Winter Haven, FL and across the nation sweating things out a bit – especially if you’ve been hit by job cuts, just recently purchased a new home, welcomed a new baby into the home, or just find things getting a bit tight.
Luckily, some of these “stress factors” may actually open the door to some tax credits you might not be aware of. If not, you should be – as they have the ability to make your refund check a bit bigger this tax season.
Recovery Rebate Credit
Economic Stimulus checks went out last year – providing up to $600 per individual and $1,200 per married couple filing jointly. If you didn’t qualify last year, or did not get the full amount because your income was too high (or too low), this may be your year! Small comfort, I know… but every little bit helps.
Child Tax Credit
In addition to the normal $3,500 exemption parents are allowed per dependent, many will also be eligible to receive a tax credit of up to $1,000 per child this year for each child that was under age 17 at the end of 2008.
There are some important limitations to take note of here:
The child tax credit begins to phase out once the modified adjusted gross income for those married and filing jointly hedges above $110,000 , above over $75,000 for single filers. Those who are married and filing separately have a limit of no more than $55,000. In addition, the child must not have provided more than half of his or her own support and, in most cases, must have lived with the filer for more than half of 2008.
Note: the title of “child” refers to filer’s sibling, stepchild, grandchild, niece or nephew.
Earned Income Tax Credit
The Earned Income Tax Credit applies to individuals without children who earned less than $15,880, families with two or more children that made less than $41,646, and families with one child that earned less than $36,995 for the 2008 tax year. If you fit into any of these categories, be sure to take advantage of this tax credit.
First-Time Homeowner Credit
This one is one of my favorites, in that it has so very many uses! I held a very informative phone interview with nationally-acclaimed mortgage expert Leslie Petersen on the First-Time Hombuyer Tax Credit.
For those who bought a home last year or have plans to do so in the near future, your government is prepared to provide you with an offer that can’t (or should not) be refused.
This tax “credit”, which really boils down to a no interest 15 year loan extends to anyone who bought — or will buy — a home between April 9, 2008, and June 30, 2009, and who didn’t own a home during the three years preceding the purchase. (This 3 year time period is the standard for re-first-timing yourself…)
The maximum amount of the credit equals either 10% of the home’s price or $7,500 ($3,750 if you are married, but filing separately), whichever is less.
Nota Bene: You will have to repay your tax credit over 15 years – either through a set bump in your taxes paid out each year or by using some of your refund to off-set that yearly payment.
Related Resources
- Stimulus: What you need to know (money.cnn.com)
- Stimulus 101: What’s in the bills (money.cnn.com)
- Income Taxes: What You Need to Know (nytimes.com)
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage loan originator, I’m your guy. Call me at 888-859-7418 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
No related posts.
Hi Kevin- These are all great tips. Working on taxes is something I have on my list. I’ll make sure I ask our accountant if we qualify for any of these. WooHoo. It could mean a few $$$$.
Barbara Swafford’s last blog post..How Do You Measure Your Success
Hey Barbara! Wow. I’m honored that you stopped by to comment. Thanks so much! Yes, please do look into any of the tax breaks you have coming. This said, if you or any of your friends are in the market for a new home or refinance, and you’ve deducted so much that your AGI on your taxes comes out to a mere fraction of what you actually made – you’ll have a tough time of it with getting a loan approved. It’s a mess right now – but the stated income loans that worked so well for the self-employed (stated meaning that bank statements were good enough to prove income rather than IRS forms) – were abused to the point that lenders now say no way… Don’t be a stranger here! Love your blog. Very inspirational!
Thanks for the list of tax credits. I would have loved to have been able to take the first time home buyer tax credit but i guess ive missed the boat. A 15 year no-interest loan seems like a fairy tale. Oh well… maybe next time.
.-= Mike@Obama Stimulus´s last blog ..Government Job:Computer Clerical/Data Entry – Standard Data Group – Temecula, CA =-.
Thanks a lot for this information, I didn’t know I could get a 10% credit for a first time homeowners purchase. This will save me some money, thanks. I just wonder why my accountant didn’t tell me about of this, I’m definably going to ask him.
.-= G. Mark @ Excessive Sweating´s last blog ..Sweating problems =-.
If you obtain a tax credit you should to be relatively certain you plan on staying in the house for at the least the short term. You’ll need to pay back a tax credit if the house you purchase doesn’t remain your main residence for at least thirty-six months.