Buying a house / $8000 tax credit?
My husband and I are thinking about buying a house but have a few credit cards to pay off first. I heard about this $8000 tax credit that you get if you buy a house this year. If we bought a house, would we get the tax credit now, if so that would pay off our credit cards and we could safely afford our new house. Can anyone explain how this process works? If we get it now, is it taxable at the end of the year?
- 1 decade agoFavorite Answer
Well first off a tax Credit is not like a tax rebate. A tax credit means you will get 8,000 deducted from your income. i.e. if you make 40,000 you will deduct 8,000 and your taxable income will be 32,000. My wife and I are also about to buy a new house. I am serving my third tour of Iraq and will be getting out of the Army when I return. Our biggest decision when I came over here was whether to save up money or pay off our credit cards. We decided to pay our credit cards and it has paid huge dividends. Our credit scores are now both over 740 and we are in a position where we can negotiate for what we want. Paying off your credit is the most important financial decision you can make. Along with not using credit whenever possible. Spend cash when you can and if you can't afford it....then you can't afford it. Follow the link for FAQ's about the tax credit. Good luck!!
- acermillLv 71 decade ago
You and your husband must both be 'first time buyers' under the law to qualify for the $8000 tax credit. A 'first time buyer' is defined as one who has not owned a primary residence in the three calendar years preceding the proposed purchase.
If both of you qualify in that regard, you can get the $8000 credit as first time buyers. If you have already filed tax returns for 2008, you can file an amended 2008 tax return to gain the credit after your purchase closes.
You are free to do with the credit rebate as you choose. It is not required that it be repaid.
- LandlordLv 71 decade ago
You would not get it now. The taxes you are filling out now are for 2008. You obtain the tax credit after you have a credit to claim. If you buy in 2009 you get the credit when you file next year.
- Army♥WifeLv 61 decade ago
you have to own the house before getting the tax credit