Layering the Tax Credits Spring 2010

By
Real Estate Agent with Coldwell Banker Gundaker

Have you paid any attention to how many tax credits are out there right now? It is amazing to me how many are there that no one seems to know about.

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Everyone has heard about the First Time Home Buyer tax credit - if you have not owned a home for the past 3 years and you buy a home the government will give you a tax credit of 10% of the purchase price of the home up to $8000 if you meet certain income levels (and the majority of us will meet those income levels). You must have an accepted contract by 30 April and you must close on the home by 30 June. With this tax credit, you can file against your 2009 or 2010 income tax. If you have already filed your 2009 taxes, you can file an amended tax return. This is a credit, if you owe money, they will subtract what you owe and send you the rest, if you don't owe money, they will send you a check. I had someone who closed and refiled his taxes the next day and a week later got his money.

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For the Repeat Home Buyer - If you have owned a home AND lived in it for 5 out of the last 8 years (now this means that you can have already moved out of the home, you may have sold the home or be renting it, or have it on the market), you meet the income guidelines, and you have an accepted contract on a new home by 30 April and you close by 30 June, the government will give you a tax credit of 10% of the purchase price of the new home up to $6500. With this tax credit, you can file against your 2009 or 2010 income tax. If you have already filed your 2009 taxes, you can file an amended tax return. This is a credit, if you owe money, they will subtract what you owe and send you the rest, if you don't owe money, they will send you a check.

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Now comes the interesting part. What other tax credits are out there that you may qualify for? Check with your State.

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In Missouri, we have the HOPE credit. If you buy a home in the State of Missouri in 2010, the STATE, will give you the value of the home's 2009 property tax with a cap of $1250 (you do have to meet income levels here also, but many buyers will meet those levels), AND if you are buying new construction and the home has any energy conservation features that value can be increased by $500. if you are buying an existing home and you add any energy conservation features within the first 60 days, you get an additional $500. In the St Louis area, refrigerators don't come with the homes. If you buy an energy efficient refrigerator, a washer or dryer, you have now added an energy efficient feature to the home - it doesn't have to be windows, siding, insulation, a water heater, furnace, etc. This program will run until they run out of the $15 million dollars they have to fund it with.

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Now comes the next set of credits that apply to ALL home owners not just new ones.

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The Federal Government Energy Tax Credits run until Dec 31st 2010. If you improve the energy efficiency of your home you can qualify for the energy tax credits. You will get 30% of the purchase price up to $1500, and for a few items, like a geo-thermal system, there is no top cap. You can find out more at :

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http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

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Now on top of the federal government program, there are rebates and state programs available. For example, in Missouri, in April. We will have one week when from 19-25 April if you buy energy star appliances, you won't be charged sales tax:

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http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MO81F&re=1&ee=1

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But, it doesn't stop there. The state also has a rebate program. I can find information out about that at:

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http://dnr.mo.gov/transform/energizemissourirebate.htm

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So I can get a $1500 federal tax credit, a state rebate and not pay sales tax AND if I'm a home buyer, get an additional $500 through the HOPE credit and the home buyer tax credit. What's not to like? Your state may have slightly different tax credits, but it's worth taking the time to find out. Talk to your Realtor and Mortage lender and ask them what you may qualify for.

 

 

 

 

 

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Rainmaker
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Christine McDaniel
Red Key Realty Leaders - Crown Point, IN
Broker Associate

Great blog Dale, easy to understand :)

August 30, 2010 01:34 AM #1
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Dale Weir

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