Home Owner Tax Credit

April 15 is fast approaching and that only means one thing for us—tax return filing preparation. How many of us felt stressed out and having headaches because of fear of late filing of income tax? How many of us worried ourselves to death because of un-checked and possibly incorrect entries in our forms? Those are things that you will prevent if you start preparing for the filing of your tax return early.

April 15 is the last day of filing. It doesn’t mean that you should file during this day. The earlier you file your return, the more benefits you will get. One of them is that if you have tax refund, you’ll get them earlier. The IRS say that if you file as early as now, they will give you your tax refund in at less than 2 weeks. Another benefit is of course, you don’t get stress because of the pressure from the deadline.

As early as now, you should have all your records ready from the copy of your last year’s return to records of your income from your employer and all documents that you will need to prepare your tax return. By now, you should also have downloaded and printed the forms that you need for your filing. You can get all forms at the website of IRS.

Set aside large portion of time for your tax return filing preparation. You need to give it enough time so that you are sure that you will not have any mistake with the forms. There are cheap software that will ask you different things as checklist. This is a good help for many of us who are not used to bookkeeping and all of those accounting stuff.

Try to finish the form as early as you can. Leave it for a day and then come back to it and check for errors. Check the SSS number and make sure that the computations are correct. These are where most people get errors in their forms.  You can use a tax return calculator to be sure.

You will avoid hassles and headaches if you start your tax return filing preparation today– not next week, not next month. More importantly, you will avoid making mistakes in your returns that may be a reason for the IRS to contact you. If you’re taxpayer, this is the least thing that you want to happen. Start early and you’ll have fewer worries.

Am I qualified?

You are qualified for the First Time Home Buyer Tax Credit if you never had a house in 3 years and you will purchase a new house from January 1, 2009 to November 30, 2009. If you own a house but your soon-to-be spouse doesn’t own one, your spouse can claim the tax credit for the two of you. You should also plan to live in that house for at least 3 years. You are not qualified if your income is above $95,000 if single and $170,000 if married.

How does the government give me the tax credit?

It is through refundable tax credit. When you are paying for income tax and you qualify for the first time home buyer tax credit, that $8,000 government incentive will be dedected from the the amount that you need to pay to the government. For example, if you need to pay the government $300 in income tax and you qualify for the first time home buyer tax credit, you will have a tax refund of $7,700. You will get a check for $7,700. This is a government subsidy. Unlike the 2008 tax credit, you will not pay for it. It is not a loan. It is a cash-out from the government to encourage you to buy a house this year instead of delaying it until the economy is doing good.

It’s unfair. I just bought a house last year. What can I do to get $8,000 tax credit?

If you purchased a house from April 1, 2008 to January 1, 2009, you cannot qualify for the 2009 first time home buyer tax credit. Instead, you are qualified for the $7,500 tax credit which is the older version of the 2009 program. You still have to pay this for a period of 15 years but you don’t pay it immediately. The first payment will be 2 years from the date you purchased your new house. It’s still a lot of help for you because you have 2 years to live in your house and pay for it in installment for 15 years. You’ll get the house for a cheap price and you pay for it without interest. You can’t get a loan from the bank as good as that.

Will I receive the whole $8,000?

If your home costs less than $80,000 you’ll get 10% of the cost as the tax credit. For example, if your house costs 50,000, you’ll only get $5,000. If your house costs $70,000, you’ll receive $7,000. If your house costs $80,000 or more, that’s where you get the full $8,000.

How to I claim my tax credit?

You can get your first time home buyer tax credit during the filing of your income tax return. Remember that you will not be qualified if your income exceed the maximum allowable amount. If you feel that your income is high for 2009, you can claim the credit during your filiing of your 2008 income tax.

You can now install energy efficient windows you have been planning to install because the government will give you 30% energy tax credit when you do so starting January 1, 2009. It is part of Barack Obama’s economic stimulus package and homeowners are excited about this development.

Last February 19, 2009, Barack Obama upgraded the energy tax credit from 10% to 30% in order to attract more homeowners to become more green in their homes.

It’s the best time to take advantage of the government incentive because now you can get up to $1,500.00 tax credits for making your home more energy eficient. You’ll not only get energy tax credit, you’ll also start to save more because of lower electricity bills when you install energy-efficient home improvements.

Some of the most popular home improvements that fall under energy tax credit are solar control window film on doors and windows as well as energy-eficient cooling and lighting system in the house.

The government is giving all homeowners the incentive to go green. With the huge energy tax credits, it is expected that more Americans will start with home improvement not only for home design considerations but also for environmental consideration and energy conservation.