2008 Tax Credit is GREAT!!
Are you Aware that your First Time Home Buyer May be Eligible for a $7500 Tax Credit?
The Housing and Economic Recovery Act of 2008 Authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009
The site http://www.federalhousingtaxcredit.com/ is dedicated to informing consumers how to take advantage of the temporary $7,500 tax credit for the purchase of a first home. It contains information on how the tax credit works, including eligibility requirements.
See FREQUENTLY ASKED QUESTIONS for more information
- Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home-new or resale-are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
- What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
- How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
- What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
Mortgage Insurance is tax-deductible until 2010 !!
Is deductibility applicable for all loan types?
Yes all loan types with mortgage insurance are eligible.
What types of properties are eligible for tax deductibility?
The deduction applies to "qualified residences," as defined in the Internal Revenue Code. Generally, that includes the borrower´s primary residence and a non-rental second home.
Who qualifies for this itemized deduction?
Households with adjusted gross incomes of $100,000 or less will be able to deduct 100% of their MI premiums. The deduction is reduced by 10% for each additional $1,000 of adjusted gross household income, phasing out after $109,000.
Is adjusted gross income calculated before or after deductions?
Adjusted gross income is calculated before itemized deductions.
How does the MI tax deduction work?
Borrowers who itemize deductions are able to reduce their overall taxable income in the same manner as mortgage interest.
2007 1040 Tax Return
Efficiency Improvement Tax Credit
RISMEDIA, Dec. 3, 2007-U.S. homeowners have just one month to utilize a soon-to-expire federal tax credit aimed at encouraging home energy efficiency. The tax credit, created by the Energy Policy Act of 2005, allows for a tax credit of up to 10% of the cost of materials for certain home improvements, including installing ENERGY STAR®-qualified windows, attic insulation or air sealing products. This part of the act, which offers a tax credit of up to $500 per household, was not extended by Congress this year.
While it appears that many homeowners are aware of the federal tax credit, only 23% had actually taken advantage of it during 2006, according to a survey conducted earlier this year by Opinion Research Corporation, an independent research firm, on behalf of Johns Manville, the Denver-based building products manufacturer. The survey also found that only 32% of homeowners believe that their home is energy efficient, despite the fact that 78% of homeowners reported that their 2006 heating and cooling costs had increased.
As consumers scramble to take advantage of the credit before it expires, Johns Manville has created a list of five ways homeowners can reap the most economic benefits from the tax credit while improving the energy efficiency and comfort of their homes.
Here are Five Ways to Take Advantage of the Home Energy Efficiency Improvement Tax Credit
1 - Add attic and/or basement insulation. The U.S. Department of Energy estimates that 40% of all air leaks in the average home are in the attic, and homeowners can expect to see up to a 30% savings on heating and cooling costs with a well-insulated and air-sealed home. Adding insulation is one of the easiest and most cost-effective ways for homeowners to take advantage of the tax credit. By purchasing insulation, homeowners can improve their home´s thermal envelope and decrease monthly energy bills for an immediate return on investment. A majority of homes in the U.S. are under-insulated, and most need up to 18 inches of attic insulation to guarantee proper thermal efficiency.
2 - Install or replace exterior windows and skylights with energy-efficient versions. All ENERGY STAR-qualified windows and skylights are eligible for the tax credit and aid the overall energy efficiency of a home by keeping out extreme temperatures and maintaining the overall comfort of a home. The maximum tax credit benefit for installing windows or skylights is $200.
3 - Trade in older storm doors and exterior doors for newer, energy-efficient versions. An older or poorly insulated exterior door can significantly contribute to air leakage. By replacing the exterior door or adding a storm door to an existing door, homeowners can better maintain the overall temperature of a home and reduce cold drafts or energy leaking out of the home.
4 - Replace an old furnace. Homeowners can replace an existing furnace with a replacement gas or oil furnace with an Annual Fuel Utilization Efficiency (AFUE) rating of 95% or higher. Purchasing an energy-efficient furnace reduces the impact of energy pollution and promotes cleaner air quality while enhancing the comfort of a home.
5 - Install a solar energy system. While the overall investment is greater, purchasing solar photovoltaic systems or solar water heaters offers a tax credit of 30% (up to $2,000) of the cost of materials and carries the greatest tax credit available. Solar energy systems provide homeowners with a low-cost alternative to traditional energy sources by generating energy directly from sun light. Systems must be placed in service between January 1, 2006 and December 31, 2007.
The home energy efficiency improvement tax credit was created as part of the Energy Policy Act of 2005 in response to record high energy prices. According to the U.S. Energy Information Administration´s Annual Energy Outlook 2007, energy prices are expected to steadily increase through 2030.
To redeem the federal energy efficiency home improvement tax credit, homeowners must provide a Manufacturer´s Certification Statement, purchase receipt and use IRS Form 5695. For more information regarding qualifying products, visit JMHomeowner.com or the Alliance to Save Energy Web site.
"Homeowners will receive an immediate and continuous return by improving upon their home´s energy efficiency," said Scott DeShetler, marketing communications manager for Johns Manville´s Insulation Systems Group.
"Insulation provides relief from rising energy costs, and it also adds to a home´s value when it comes time to sell. According to the U.S. Energy Information Institute, adding insulation and air sealing increases a home´s resale value, and 55 percent of Americans are willing to pay more for a home with energy-efficient features."
Installing insulation in an attic can be an easy, do-it-yourself project for even the most novice weekend warrior. Homeowners can also hire an insulation contractor to complete the project, although installation costs cannot be deducted as part of the energy tax credit.
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