- 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 to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

TurboTax Articles

Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

Add a Comment

*0 / 3000 Character Maximum