Increase Your Tax Return

If you purchased a home in 2008 and it was your first home and your primary residence then you may be able to increase your refund by as much as $7,500!

If that home you purchased in 2008 was not your first home, but was the first home your owned in the past three years and was your primary residence then you could qualify for $7,500 off your taxes too.

Here is how it works: http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html

1. If you made $75,000 or less as an individual and $150,000 or less as a married couple in 2008 then you can claim 10% of the purchase price of your home or $7,500 whichever is less.

2. So you purchased a $200,000 home in 2008 and you meet the income requirement. You can claim 10% of the purchase price of the home which is $20,000 or $7,500 – whichever is less. So you can claim $7,500.

3. So lets say in 2008 your tax situation is:

Tax Liability = $6,000
Taxes Withheld= -$5,000
Tax Credit= -$7,500
Tax Refund= $6,500

4. The above example shows that even if you only paid $5,000 in taxes during 2008 you can still get back $6,500! So you can have the IRS give you money this year. Go get it!

5. If you do decide to tax this tax refund – it is a loan. You have to pay back this $7,500 over the next 15 years – interest free. Your tax liability will be increased every year by $500. This is a great loan, but still a loan – not free money.

When you do your taxes you will put this credit on line 69 of your form 1040. You will need to complete form 5405 as well. Consult your accountant before completing your taxes!!

The 2009 first time homebuyer tax credit is even better so if you want to look into buying a home check out www.thebriteway.com.