- Days left

Home buyers facing deadline for tax credit

home for saleTime is running out for qualified home buyers to take advantage of the 2010 home buyer's credit. First-time and existing home buyers have until this Thursday, September 30, 2010, to close on their purchases in order to take advantage of the credit. The original version of the credit had a June 30, 2010, deadline, but Congress pushed through an extension after complaints from Realtors, mortgage brokers and taxpayers.

This doesn't mean you can rush right out and sign a contract today. Under the law as extended, homeowners must have entered into a bona fide sales agreement to buy a new home by April 30, 2010. However, in order to qualify for the credit, home buyers have until September 30, 2010, to close on the deal. The extended deadline does not affect the criteria for the credit; it otherwise remains the same.

An estimated 200,000 taxpayers were thought to be affected by the original June 30, 2010, deadline, which sent Congress scrambling to extend it. Initial reports indicated that up to 80,000 taxpayers were at risk for losing the credit with the June deadline because of difficulties closing due to obtaining a mortgage. However, that estimate was pushed up because of the number of short sales which were pending. A short sale happens when the sale price of a house is less than what is owed on the property. As a result, it can be difficult to clear the sale until the obligations are either paid off or the bank is satisfied that it will be paid off at sale.

The amount of money at stake for taxpayers was significant: The available credit is up to $8,000 for first-time home buyers and up to $6,500 for existing home buyers. Realtors claimed that the availability of the credit was pushing the sales of homes upwards (though, realistically, the data didn't necessarily support those assertions). What is clear, however, is that with the housing market making a shaky recovery, without an additional extension, this might be the last of the home buyer credits that taxpayers see for a while.

Increase your money and finance knowledge from home

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

TurboTax Articles

8 Things You Think Are Tax Deductible That Aren't

There?s a fine line between looking to save money on your taxes and taking deductions that will raise eyebrows at the Internal Revenue Service. Some taxpayers are tripped up by expenses that they assume are tax deductions, but don?t qualify under IRS guidelines. Here are a dozen items that can lead to unpleasant surprises in case of an audit.

9 Things You Didn't Know Were Tax Deductions

Few realizations are more painful than realizing that you forgot to include a tax deduction that would have lowered your tax bill or increased your tax refund on your tax return. Here are some tax deductions that you shouldn't overlook.

A Comparative Look at State Taxes

Ever wondered which state has the highest gas tax or the lowest overall tax burden? Interact with the infographic below to compare income tax, property tax, and other taxes by state.

Add a Comment

*0 / 3000 Character Maximum