Just a Thought on Tax Day
April 15, 2010
As you complete your 2009 income tax filing, was the amount that you owed greater or lesser than you expected? Just think, if you had purchased a home as a first time home buyer, you would have had toe items that could have reduced your tax liability. If you purchased in the window of opportunity for the $8,000 tax credit, your tax build could have been reduced by $8,000. (Remember this is not a deduction, but an actual credit against the tax that you owe.)
The second item that might have reduced your tax liability would have been the interest paid on the mortgage that you obtained to purchase your home. To date, Congress has not taken this interest deduction away from property owners. The first several years that you own a home, most of your mortgage payment is, in fact, interest.
It is too late for your 2009 taxes, but not too late for 2010. The $8,000 tax credit can still be obtained if you have a valid contract to purchase a home before April 30, 2010. Yes, just two more weeks to act. The good news of course is that California has a $10,000 tax credit if you close an escrow after May, 1, 2010 and before December 31, 2010. This credit is doled out over a three year period, but the interest deduction will still be a benefit even if you miss these tax incentives.
So, it is time to consider buying your first home. Prices are remarkably affordable and interest rates continue to hover around 5%. Go for it !
As you complete your 2009 income tax filing, was the amount that you owed greater or lesser than you expected? Just think, if you had purchased a home as a first time home buyer, you would have had toe items that could have reduced your tax liability. If you purchased in the window of opportunity for the $8,000 tax credit, your tax build could have been reduced by $8,000. (Remember this is not a deduction, but an actual credit against the tax that you owe.)
The second item that might have reduced your tax liability would have been the interest paid on the mortgage that you obtained to purchase your home. To date, Congress has not taken this interest deduction away from property owners. The first several years that you own a home, most of your mortgage payment is, in fact, interest.
It is too late for your 2009 taxes, but not too late for 2010. The $8,000 tax credit can still be obtained if you have a valid contract to purchase a home before April 30, 2010. Yes, just two more weeks to act. The good news of course is that California has a $10,000 tax credit if you close an escrow after May, 1, 2010 and before December 31, 2010. This credit is doled out over a three year period, but the interest deduction will still be a benefit even if you miss these tax incentives.
So, it is time to consider buying your first home. Prices are remarkably affordable and interest rates continue to hover around 5%. Go for it !
posted by shirley harry at 9:30 AM
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