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WestCoastXPlant
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 Posted: Thu Jun 18, 2009 7:24 pm GMT Post subject: Re: first time buyers "credit" |
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| Brian C wrote: | But here's the downside. When I do my 2009 taxes they ask for the $8k back through my taxable income. If I don't give the government enough money in 2009, then I could be writing a big check instead of seeing a refund. To offset this, I will be increasing my federal deductions to they can take more every paycheck.
I don't think the average person is thinking this over when requesting the money early. Its not like you have years to pay it off like last year. Ive run the numbers with my father (an accountant) and I will be able to give back most of the $8k by Feb-March. |
Why do you believe you need to repay the credit? Unlike the one of 2008, for homes purchased in '09 you don't have to repay unless you plan to move out within 3 years.
http://www.irs.gov/newsroom/article/0,,id=206293,00.html |
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melonrightcoast
Joined: 22 Feb 2009
Posts: 236
Location: metrowest
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| Posted: Thu Jun 18, 2009 8:37 pm GMT Post subject: $8K tax credit |
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Hmmm. Isn't this because the IRS is fronting him the money? If not enough taxes are paid overall, then Brian C. would owe money on tax day 2010. However, is the IRS "charging" for the "early" payment? Is this complicated because your taxes will be different after you purchase the home (i.e. deducting interest)?
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Brian C
Joined: 13 Feb 2009
Posts: 98
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| Posted: Thu Jun 18, 2009 11:55 pm GMT Post subject: |
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Here's some info from a website talking about getting the money upfront:
| Quote: | Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment or early credit.
Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. |
Right now my withholding's are zero, so I will need to adjust it. |
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melonrightcoast
Joined: 22 Feb 2009
Posts: 236
Location: metrowest
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| Posted: Fri Jun 19, 2009 1:29 am GMT Post subject: $8K tax credit |
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ah. you don't get the credit all at once, but reduce your with-holdings to get it faster than next spring. so you think the risk that many people applying for the credit will run into is that they will not change their with-holdings back in time?
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