In a continuing effort to boost the economy by jumpstarting real estate sales by first time home buyers, Congress recently enacted a bigger and better tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009.

A tax credit is significantly better than a tax deduction since it is a direct reduction in the amount of taxes owed. This typically results in a huge tax refund! Or if you alter your tax withholdings-- you will net considerably more from each paycheck.

The tax credit is for first time home buyers only. DON'T RULE YOURSELF OUT if you have previously owned a home. The law defines a first time buyer as one who has not owned a principal residence in the previous 3 years-a rental home or vacation home will not exclude you from this tax credit.

Most purchases will qualify for the entire $8,000 credit since it is equal to 10%of the home's purchase price (up to $8,000).

There are income restrictions with the credit which are important to consider. The tax credit is reduced proportionately for tax payers with Modified Adjusted Gross Incomes greater than $75,000 for an individual or $150,000 for a married couple filing jointly. The tax credit is not available for individuals with Modified Adjusted Gross Incomes greater than $95,000 or $170,000 for married couples.

The tax credit does not have to be paid back-as long as you use the residence as a principal residence for at least three years!

Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats although, again, you would have to use the residence as your principal residence.

You can even build a new home-or have a contractor or new home builder to build the residence as long as long as the first date of occupancy of the new home is before December 1, 2009 and if a new home builder builds it-the closing occurs prior to December 1, 2009.

This program can be combined with the Mortgage Revenue Bond (MRB) for additional benefit.

Overall this tax credit is basically like a bonus for first time Buyers. The government is more or less paying $8,000 to you to buy a home! This combination of tax credit bonus, low interest rates, large amount of inventory and reduced prices on many homes makes it a great time to buy a home.

If you're considering buying a home in Colorado take a look at Evergreen Real Estate.

Bob Maiocco Evergreen real Estate Broker Keller Williams Colorado Denver Real Estate Article Source: http://EzineArticles.com/?expert=Bob_Maiocco

Are you going to be a first-time home buyer this year? Then you may want to take advantage of the new $8,000 tax credit. There are some rules, so let me explain: Some recent analysis indicates that the following rules may apply - albeit some changes could be forthcoming as we get the "weigh in" from tax professionals around the nation:

The deduction is worth 10 percent of a home's value up to $8,000. This means that if you buy a $60,000 home - your credit will be $6,000. It also means that all homes purchased for more than $80,000 may qualify for the maximum credit amount of $8,000.

Income Limits for a full tax credit: A married couples' modified adjusted gross income (MAGI) should be under $150,000 and; Single filers' MAGI should be less than $75,000. Partial tax credits may also be available for those who may more than the limits listed above. To be eligible for a partial tax credit, married couples must have a modified adjusted gross income (MAGI) over $150,000 but under $170,000; and single filers with incomes over $75,000 but under $95,000.

Married couples filing separately: Both claim 5 percent of the home's purchase price on their tax returns. This means that for a home purchased at $80,000 or more, each can receive a $4,000 credit each.

There are also a few other issues to consider as well:

Unlike a tax deduction, this is a tax credit. That means the entire amount goes back to the first-time home buyer! Deductions on the other hand, such as mortgage interest, are subtracted from gross income before tax is calculated and reduce you taxable income. If qualified for $8,000, the buyer gets $8,000; even if they would not owe that much in taxes otherwise.

The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 1, 2009. The tax credit does not have to be paid back, providing the home buyer keeps the property for at least 36 months and resides in the home.

To qualify as a first-time home buyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer. If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009, but the owner does not take possession until 2010, the buyer would not qualify.

The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that the President signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.

The tax credit is not a down payment, but it could be used toward a down payment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund. By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a down payment.

If the taxpayer does not buy a home in the qualifying period, they could still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.

This article is provided for informational purposes only. Always consult your tax professional or IRS for specific information regarding your taxes

Ric Del Vizo, Licensed Real Estate Agent. Coffey & Company Realty, Sarasota, Florida. http://www.SarasotaForeclosuresNow.com Article Source: http://EzineArticles.com/?expert=Ric_Del_Vizo

Certainly you have heard some variation of the popular statement, "Knowledge is power!" Well, in the context of lowering property taxes on your home, knowledge is power and can translate into some serious money. California property owners can benefit over the next several years with a little knowledge and some capitalistic motivation.
In the state of California, property owners may request a decline-in-value of the assessed value of their home and lower property taxes they pay.

Around every opportunity to save or make money, depending on your perspective, sprouts new entrepreneurial endeavors to capitalize on such an opportunity. I am in full support of businesses being created around a developing need in an economy, but do not believe creating new businesses is always a desirable outcome when a need develops in a market. Instead, I am in full support of individuals proactively capitalizing on these opportunities themselves, especially when our government, of the people, provides a mechanism to do so.

Regarding property tax appeals and reassessment of home values, I encourage a philosophy and practice of do-it-yourself. With a little education and direction, most if not all people would be able to successfully lower property taxes in this real estate market. If you want to learn what needs to be done and how it needs to be done, look up the Property Tax Appeal Copilot. The program is a training workshop for homeowners looking to do-it-yourself. Paying for expensive property tax consultants promising to do what you can do in 2-3 hours is a waste. And waste is abhorred in the field of economics - certainly in these times.

Of all the capitalists out there I consider myself one in the truest form. As such, I am the first to propose that more people become entrepreneurs. What do I mean by this? Well, I am certainly not advocating droves of employees resigning from secure employment to try a risky endeavor for the shear fun of the experience. I am suggesting people become "home entrepreneurs."

A home entrepreneur endeavors to explore opportunities that arise in the context of home economics. Balancing a checkbook and buying groceries are everyday mundane tasks done in the household, but researching new ways to increase the wealth of your home is the job description of a home entrepreneur. After discovering hidden ways of increasing the wealth of one's household, a home entrepreneur must educate himself and learn what is necessary before acting. Empowered with knowledge and information, a home entrepreneur can act and benefit from opportunities that such an individual sought out and went after. For example, California homeowners researching the law regarding property decline in value applications for a decrease in property taxes will find with proper knowledge and information, they can increase the wealth of their household tremendously.

Many may argue against my do-it-yourself approach by citing the benefits of delegation and time management. By devoting yourself to work at which you are proficient and well informed you create a value greater than doing work at which you are less proficient or skilled. Under this axiom, one will only do tasks he is skilled and proficient, then delegate tasks to which he is less skilled to others. However, the benefits of a small time and energy commitment on the part of a home entrepreneur with a substantial value have the greatest value before the negative effects of decreasing marginal utility take hold. In regards to property tax reassessment of one's home, it is far beneficial to do-it-yourself and invest the time and energy to reap the rewards of lower property taxes.

Now you may find yourself asking the question "how do I reduce property taxes on my home, and can I really prepare a profession property tax appeal and be taken seriously?" The answer is "Yes you can! With a little help!" Check out the Property Tax Appeal Copilot program, and find out just how easy it really is to save thousands of dollars of your home this year, and in the coming years.

Robert Wall is a real estate agent practicing in Los Angeles. Robert has been actively following market trends for years, and has identified an unprecedented opportunity for California homeowners to lower property taxes and save thousands of dollars this year, and in the coming years.

Robert and his team have developed the Property Tax Appeal Copilot program so that homeowners can do it themselves. Homeowners who complete the program will produce a professional property tax appeal to present to the county assessors office and win.

Robert Wall is a graduate of Cornell and Tulane universities and holds a JD and an MBA.

Article Source: http://EzineArticles.com/?expert=Robert_Wall