What is the actual in hand value of a 15,000 home buyers tax break? The one President Obama just signed?
March 6th, 2010 by admin
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6 Responses to “What is the actual in hand value of a 15,000 home buyers tax break? The one President Obama just signed?”
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Essentially (in the simplest form I can break it down to) is around $4,000. Depending on your other deductions, home interest, kids, medical bills, income level, adjusted income level, etc, etc. But, the short answer for most middle class Americans… it’s about $4k.
Slainte,
-Dan
I think its been amended to any buyer not first time..
It is a tax credit so you would receive a $15000 refund… If you have $15000 in Federal Income Tax Withholding. If you don’t have 15K in withholding you would only get back however much you withheld. This would depend on whether you claimed one or zero. If you claimed zero you probably with held approximately $8000, if you claimed one you probably withheld about $6000. In either of these cases you would receive all of you withholding regardless of other deductions. This is assuming two things, the bill is eventually passed with this tax credit still intact and two, you still have a job that provides you an income and therefore withholding.
President Obama did not just sign this tax credit. The economic stimulus package was amended in the Senate to add this provision, but it still needs to pass the House.
If it passes both Senate and House and is signed by President Obama, it would be a $15,000 tax credit for any home purchased in 2009 as a primary residence. You’d need to hold on to it for two years or be required to pay it back. Not just for first time buyers.
You should be emailing your Rep in Congress NOW, urging them to keep this provision in the stimulus package. It would obviously have a huge impact on many, many of us – and would go a long way toward getting the real estate market moving again! Our folks in DC need to know if you care about this.
1- It’s a tax credit, not a deduction. That means it reduces the amount you owe in taxes, not your Income. What’s more, the credit is refundable, which means that you get the whole benefit, even if your tax liability is less than $15,000. (e.g. if you owe $8,000 in taxes, you’ll not only not owe any taxes, the gov’t will actually give you $7,000.) If you qualify for the full $15,000, you’ll get the whole credit.
2 – Not everyone will qualify for the full $15,000. The credit is worth 10% of the value of your house, up to $15,000. That means if you buy your house for less than $150,000, you only get 10%, not $15,000. If you buy for more than $150,000, you only get $15,000.
3 – Obama hasn’t signed it. The House hasn’t even approved it. The bill the Senate just passed could end up being substantially different from whatever eventually gets passed.
Well said Zack! No one is explaining that not everyone will benefit from the credit. Many people do not have a tax liability of $15,000, therefore, will only get a portion or none of the credit (depending on their situation). The good thing is that is can be divided into two years so if you can take some this year then some next if you don’t qualify for the full $15k. I think many people will be confused and disappointed when the details come out.