IRS Tool Calculates What You Owe on First-Time Home Buyer Tax Credit
This was a big draw for first time home buyers, especially as time was running out to take advantage of it. For many, it sounded like free money from the government just to go out and buy a home and in fact it was free to an extent, interest free.
This article and tool helps home buyers who took advantage of the first time home buyer tax credit figure out exactly how much they need to start paying back.
If you bought a home in 2008 and took advantage of the original first-time home buyer tax credit in 2008, you have to pay it back. The credit was a no-interest loan, and you repay it in equal installments over 15 years through your tax return.
If you claimed the tax credit in 2009, 2010, or 2011 and then sold your house within 36 months, you’ll also have to pay back the credit when you next pay your federal taxes. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009, or 2010. If you took advantage of a later version of the tax credit and stayed put, you don’t have to repay it.To make it easier to calculate how much you have to pay back, the Internal Revenue Service developed an online tool, which tells you:
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