The first time home buyer tax credit is a great opportunity for first time buyers and homeowners who have recently purchased or built their first new home. There are many things to consider when you apply for this, such as your income level and the type of property that you purchase. In this blog post we will talk about what the first time homeowner tax credit entails, how much it can save you in taxes, and some guidelines on how to qualify!
The first time home buyer tax credit allows first-time homeowners to save up to $7500 on their federal income taxes! This is available for new homes and newly built ones. Not only can this help reduce the amount of money that you owe in taxes, but it could also be a great way to save some extra cash or get your down payment together before you actually buy a house. The first step in applying for this credit is figuring out how much you will owe once all deductions are taken into account (such as charitable contributions). You should take your anticipated refund from next year’s return and subtract any other credits such as child care expenses so that there isn’t an overage when adding these two numbers together:
This number indicates HOW MUCH you will be receiving in terms of a tax refund. Next, take the number that you just calculated and multiply it by $7500:
This is how much your first time home buyer tax credit will save you on YOUR taxes! There are some guidelines to follow when applying for this credit so let’s go over them now. You must meet both qualifications below in order to qualify for this first time home buyer credit:
You haven’t owned or used another house as an owner-occupant (or if anyone else has lived in the property) within three years before buying/building your new one. If they move out, then it does not affect eligibility; however, there can only be two moves counting toward fulfilling these criteria.