First time buyer tax incentive?

[Russell]

umm...yeah...nothing new there. They've been spending your money however darn well they please whether you want them or not. I was against the war but I didn't get a choice to opt-out from spending my tax dollars on it...for example.

Speaking of opt-ing out...reminds me of the Snoopy comic strip "Dear IRS"

[Russell]

Exactly. Now I can brag that I got a gov bailout like the banks got lol. That is the one reason we decided to take it. Work is very iffy. I am not at risk of being laid of perse however we are taking curtailments of 1-2 weeks per month so I figured the best interest for my family and our new home would be to have this money sitting in the bank. I plan to put it in my ING savings with 2.4APY. This money alone is enough to pay our house payments for almost a year if the worst case should happen.

Cool, how do you apply for it? Is it part of doing the taxes? I haven't started on mine yet. I doubt we qualify for it in 2008 since we both had our jobs...see what I mean how it wasn't thought through. What if someone like my wife lost their job Jan 10th?

[reptile411]

I'm OK with them lowering my tax liability. My problem is with them giving me free money. Example:

I buy a home for 150k
My tax liability for the year is 5k
Are they giving me 10k? or are they letting me keep my 5k only? I'm under the impression they are giving me 10k of your money without your permission. In a free society, that's called theft, much like auto workers getting overpaid on my dime. IT PISSES ME OFF, and it should any other red blooded American.

I tend to agree with you in a sence. I am 100% agents the bank and big 3 bail out. If you ask me they put themselves in this position and should pay for it, however. My employment and the future of our way of life is at stake so while I disagree with the bail outs I tend to think they are necessary. My hope is that Obama dose it right and makes them pay back every penny "I doubt it" and designs our systems to be less depended on corporations so this dose not happen again "again I doubt it" This is the same theory here. I am not for taking money from people and giving it to first time buyers however I think accepting this money is mandatory in ensuring my family's way of life and ensuring we get to keep our home that we have worked so hard for so many years to "earn" Unlike the banks and big 3 we have to pay this back and yes we will pay taxes on it. For the next 15 years we will be paying our tax payers back, we will pay more than $7500 simply because the $500 we earn to make our payments each year is taxable income is it not? I am sure there are those unfortunate souls out there who will loose there jobs and not be able to pay this back right away as no job=no tax return however I think this is something to praise not be mad about as it will for sure save a lot of Americans from whatever fate they may face had they not had this extra cash on hand. As I said We worked very hard to earn what we have "it took me 30 years to get this far" Despite a dwindling economy we determined this was not only a good time to buy but a good time to help just about every market by walking into a small affordable home while so many others were walking away. The family we purchased our home from was being foreclosed on. While working on the home I saw there little boy playing there everyday and could sence the love that went into making this there home and it just crushes you to know they are not living in a small apartment where they don't even have a couch. They were taken off guard by this economy, housing market, ARM's and job market. This money is intended to keep my family from the same fate. This is nothing when compared to the hundreds of billions of dollars of gov bailouts and "will not" get paid back. After all when you think about it how many people are buying houses now? Not very manny so the amount "loaned" cant even nearly compare to what is being "given" to banks and corporations all over the world right now. Now that if you ask me is something to be mad about. Better time may be spent emailing our officials on the bailouts. There are 24,054 members of this forum alone. That many emails for sure would command attention.

[reptile411]

Cool, how do you apply for it? Is it part of doing the taxes? I haven't started on mine yet. I doubt we qualify for it in 2008 since we both had our jobs...see what I mean how it wasn't thought through. What if someone like my wife lost their job Jan 10th?

We both worked on 08 and still work now. We qualified for it. It is for "first time home buyers" that purchased there house from I think 04/08 to 03/09. Do a Google search for "first time buyer tax credit" there is a lot of info on it.

[maat55]

[

QUOTE=reptile411;206801] My employment and the future of our way of life is at stake so while I disagree with the bail outs I tend to think they are necessary.

IMO, the government has went too far in tying the hands and feet of capitialism to the point it can't function properly. It's solution is to complicate the system more and to slap our future generations with debt they cannot pay back. This is exactly what the founding fathers feared.

I am not for taking money from people and giving it to first time buyers however I think accepting this money is mandatory in ensuring my family's way of life and ensuring we get to keep our home that we have worked so hard for so many years to "earn" Unlike the banks and big 3 we have to pay this back and yes we will pay taxes on it.

What about all those people who will not buy a house this year? Are they not just as in need as you? I want to keep my house also, but it is not your responsibility to see that I do. That aside, you paying it back is a positive, to a negative program. My guess is, due to the new stimulus, you will not have to pay it back.

I am sure there are those unfortunate souls out there who will loose there jobs and not be able to pay this back right away as no job=no tax return however I think this is something to praise not be mad about as it will for sure save a lot of Americans from whatever fate they may face had they not had this extra cash on hand

.

Are you serious? Where the hell is my savoir? I had to save my own EF. I don't even have the luxury of drawing unemployment if my business fails, but by god I paid into the system.

As I said We worked very hard to earn what we have "it took me 30 years to get this far

And I didn't?

This money is intended to keep my family from the same fate.

Despite the fact that I think it is absurd, I could live with it, if, you really pay it back, which I don't think you will.

This is nothing when compared to the hundreds of billions of dollars of gov bailouts and "will not" get paid back

.

This is the problem with this country, billions of our grandchildrens dollars are not that important to us. What's a billion anyway, chump change.

After all when you think about it how many people are buying houses now? Not very manny so the amount "loaned" cant even nearly compare to what is being "given" to banks and corporations all over the world right now. Now that if you ask me is something to be mad about.

I guess being dumb in one area makes it ok to be stupid in another.

Better time may be spent emailing our officials on the bailouts. There are 24,054 members of this forum alone. That many emails for sure would command attention.

[/QUOTE]

Finally, a breathe of wisdom.

[reptile411]

Ok, considering this is a voluntary $7,500 You have the choice to take it or not, are you saying if you had the choice you would not take it?

"I could live with it, if, you really pay it back, which I don't think you will."

I don't take offense to things on forums but I almost did to this. I have 0 debt other than my house and car payment witch I pay early all the time, this means I pay my bills. As far as this "loan" goes you have no choice. They suck it right out of your tax return so assuming you are working and getting $500 or more per year back on your taxes it dose not matter if you are not responsible, they take it right out. Its not like I have to wright them a check or anything. I fail to understand why someone would get mad at anyone who would take an offer like this, get mad at our government to making the offer.
Here is a good starting point Email President Obama Congress can see any complaint by sending a letter to 111th Congress, 1st Session Washington, DC 20515 or fill out the FDIC Consumer Complaint Form

[maat55]

[QUOTE]

Ok, considering this is a voluntary $7,500 You have the choice to take it or not, are you saying if you had the choice you would not take it?

I would not take it on principle. I don't think the government needs another program to run badly.

"I could live with it, if, you really pay it back, which I don't think you will."

I don't take offense to things on forums but I almost did to this. I have 0 debt other than my house and car payment witch I pay early all the time, this means I pay my bills.

My statement that you might not pay it back is based on my earlier statement that due to the new stimulus, you may not have to. Whether you would, if you were not obligated to, is for you to know.

I fail to understand why someone would get mad at anyone who would take an offer like this, get mad at our government to making the offer.

The free loan is not going to make me loose sleep at night, it's the free money they are going to give away after the new stimulus, which will probable negate your loan.

[jIM_Ohio]

I'm OK with them lowering my tax liability. My problem is with them giving me free money. Example:

I buy a home for 150k
My tax liability for the year is 5k
Are they giving me 10k? or are they letting me keep my 5k only? I'm under the impression they are giving me 10k of your money without your permission. In a free society, that's called theft, much like auto workers getting overpaid on my dime. IT PISSES ME OFF, and it should any other red blooded American.

I don't know for sure, but I am thinking this is a refundable credit. If I had a 1040 in front of me, I could confirm for sure. If the credit is listed in the REFUND section, it is 100% refundable (meaning refund is calculated first, then the credit is applied).

A non refundable credit is in the section of the 1040 above that, which means it can only reduce tax liability to zero (so some of those credits- like the education ones and the child tax credit) may not give someone making only a little money the best benefit.

[jIM_Ohio]

[quote=maat55;206830]

I would not take it on principle. I don't think the government needs another program to run badly.

"I could live with it, if, you really pay it back, which I don't think you will."



My statement that you might not pay it back is based on my earlier statement that due to the new stimulus, you may not have to. Whether you would, if you were not obligated to, is for you to know.



The free loan is not going to make me loose sleep at night, it's the free money they are going to give away after the new stimulus, which will probable negate your loan.

It's not a free loan if maat works (which I believe he does). It is a loan with a 15% or 25% interest rate (federal) plus whatever bracket he is for his state the year after he takes the $7500. It's not free.

For maat to pay back the $7500, he would need to do the following:
1) Earn $625 to have $500 of extra income each year to pay the tax bill
2) Earn enough interest on the $7500 to beat his state tax rate (in Ohio for me that is 6.6%- tough to get 6.6% return on cash these days).

If he does not take the credit, he has $500 extra cash each year to save or spend at his discretion, and he could shield the $625 he needs to make from taxes- so he could actually save MORE than the $7500 the credit gave him if he uses a 401k or IRA.

[momof1in150]

It comes out as a tax credit. If you owed $1000 then you would get back $6500. The thought behind it is that if you buy a house then you would have the deductions (mortgage interest and taxes) to cover the cost of repayment of the loan.

[maat55]

[QUOTE]

It's not a free loan if maat works (which I believe he does). It is a loan with a 15% or 25% interest rate (federal) plus whatever bracket he is for his state the year after he takes the $7500. It's not free.

For maat to pay back the $7500, he would need to do the following:
1) Earn $625 to have $500 of extra income each year to pay the tax bill
2) Earn enough interest on the $7500 to beat his state tax rate (in Ohio for me that is 6.6%- tough to get 6.6% return on cash these days).

If he does not take the credit, he has $500 extra cash each year to save or spend at his discretion, and he could shield the $625 he needs to make from taxes- so he could actually save MORE than the $7500 the credit gave him if he uses a 401k or IRA.

I don't see the need to earn extra money to payback the loan. Say I take the 7500 and put it into a high yield savings account. I earn interest for two years, then I take 500 out to pay the first year, draw interest again, then take another 500 out the next year.

Basically, you payback the loan with the loan money and earn interest while doing so. You only pay tax on the earnings. I could be wrong, but that is how I see it. Of course, with the new stimulus, you may get to keep it for nothing.

[jIM_Ohio]

Most states would tax the $7500 refund you received the previous year. So there is state tax owed on the money too. If you use the credit to actually invest, it would be cheaper to just invest the $500/mo for 15 years than to take the credit.

[maat55]

Most states would tax the $7500 refund you received the previous year. So there is state tax owed on the money too. If you use the credit to actually invest, it would be cheaper to just invest the $500/mo for 15 years than to take the credit.

That's probably true, just another reason taking it doesn't make sense. If it causes people to buy houses(hopefully they can afford) and they pay the money back, I don't really care. It's the giving, with no payback thing I have a problem with.

[globetraveler]

Information on the newer version which is up to $15,000 tax credit that you do not pay back. As of now, it looks like it will pass, but you never know.

The $15,000 Home Buying Tax Credit: 6 Things to Know - The Home Front (usnews.com)

[reptile411]

That's probably true, just another reason taking it doesn't make sense. If it causes people to buy houses(hopefully they can afford) and they pay the money back, I don't really care. It's the giving, with no payback thing I have a problem with.

I must stand corrected, It looks like they are going to wave the requirement to pay it back, or at least try to.

"Home-buyer credit: The Senate bill would double the size of an existing temporary home-buyer credit to $15,000. It would also allow all homebuyers to claim it and remove the requirement under current law that the credit be paid back. The House bill also removes the repayment requirement but leaves the credit maximum at $7,500 and would offer it only to first-time buyers."
Taken from CNN Money
Next steps on stimulus: The key issues - Feb. 8, 2009

On that note it is not taxed. I spoke with my tax person and it was explained to me the $500 a year you use to pay it back is already taxable income, you would be taxed for the $500 weather you took the $7500 or not and there is no way they will tax you twice on the $500, makes sence to me.