There are a few new tax credits (and some old ones) that could help you get a refund when tax season rears its ugly head. You may qualify for one of these credits if you have children, are low-income, did not get the full economic stimulus check, deduct property taxes, OR had part of your mortgage debt forgiven.
Read about all six credits here. If you read the entire story you will see I wrote it. So I can vouch for all the info! The best thing about tax credits is that they directly contribute to you getting money back. So if you owe $200 in taxes but have a $600 credit, Uncle Sam gives you a $400 refund.
Also, this year you can file your taxes electronically FOR FREE no matter what your income.
UPDATE: The first-time home buy credit of $8,000 does NOT have to be paid back. Thanks to reader Katharine who pointed this out!
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
Dear Julia:
I am a real estate broker and I wanted to give you the latest info which I saw in the LA Times yesterday. The tax credit for first time homebuyers (haven’t owned a home in 3 yrs.) was just raised to $8000 if you buy a home between Jan 01 2009 and Dec 31 2009 and YOU DO NOT HAVE TO PAY IT BACK!!!!!!! Yay! How great is that?
I di not know that it was limited to 10% of the value of the home purchased, are you sure about that?
I have a copy of the article in a .pdf file if you want me to send it to you.
Thanks for all your great tips!
Sincerely, Katherine
Hi Katherine, thanks for your comment. I double checked my notes and this credit is actually a loan. Perhaps the LA Times story was about a different credit, or maybe it was an error. For more info on the home owner tax credit I wrote about, visit this IRS Web site: http://www.irs.gov/newsroom/article/0,,id=186831,00.html
Sorry, the first time homeowner tax credit was revised in Feb 2009 and the link to the IRS article is out of date. The current tax credit is $8000 and it applies to homes purchased from Jan 09 to Dec 09. This credit DOES NOT HAVE TO BE PAID BACK. If you purchased in 08 and get a tax credit, it will have to be paid back. See Form 5405 Revised Feb2009 at the IRS site to confirm this information.
Katherine, you are right! Thanks for giving me a heads up. I updated the post to reflect that the first-time home buyer credit is not a loan.
Yes, the rebate recovery credit has been getting a lot of press (Including the WSJ(, as well as causing much confusion.
Most press also includes your links to determine how much of the stimulus payment one did receive for ’07 and eligibility requirements.
In my case, I am single, went over my limit that year and did not receive the entire $600, but for my ’08 taxes I am able to get back the balance, which will be added to my refund. Every little bit helps!
Be sure your tax adviser has the latest software package and it should calculate this automatically
I noticed that this is not the first time you mention this topic. Why have you decided to touch it again?
This is very hot information. I’ll share it on Digg.