A monetary amount directly credited to a person's state and federal taxes. This reduces the amount of taxes owed directly, dollar by dollar. A $1,000 tax credit reduces taxes owed by $1,000.
Use a tax credit to help you save even more when you buy foreclosed home. More than just a tax deduction, the federal tax credit is just like money in your pocket. Unlike previous credits, the current home buyer tax credit does not need to be repaid within 15 years. In fact, you will never have to pay back the federal government tax credit. It's yours to keep no matter how long you own the home. And don't forget to look for state and local tax credits.
You can use a foreclosure tax credit incentive to make a great deal even better. We use our real estate expertise to bring you listings of foreclosed homes for up to 50% less than current market values. And now you can increase those savings even more by taking advantage of a rebate or deduction on tax credit foreclosed homes. These government programs will save you even more money on your next housing investment. Why spend more when you can save big money with a real estate tax credit?
In simple terms, a tax credit reduces the amount of tax you pay on your income. The amount of housing tax credit that you can obtain is based on the contributions that you make and also on your credit rate. The credit rate can be anywhere between 10% and 50%, which depends on your adjusted gross income. In other words, the lower your income, the higher the credit rate. The credit rate also depends on your filing status. If you don't owe any taxes, the IRS will send you a check for the amount of the tax credit you are owed. There's also what's called an Investment Tax Credit, which is an incentive that allows individuals or companies to deduct a certain percentage of investment costs from their tax liability besides the normal allowances for depreciation.
Simply put, the way a tax credit works is by reducing income tax liability on a dollar for dollar basis. Housing tax credits can be claimed on your income tax return. In this particular case, the US Congress has created a tax credit for first-time home buyers, allowing them to obtain a certain amount of money when buying a property. Eligible home buyers have to claim the credit on the appropriate IRS form. It's definitely a good opportunity for enterprising home buyers as this investment tax credit can be used towards buying any single-family residence (including a condo, multi family home, or townhouse), provided it will be used as the home buyer's principal place of residence.
In order to be eligible for a first-time home buyer tax credit, first of all, you must be at least 18 years old. The housing tax credit is for first-time home buyers (if filing jointly, this applies to both husband and wife) who have not owned a principal place of residence within the last three years. Also, if you own a vacation house or have rental property, you are not disqualified from obtaining a tax credit. As a first-time home buyer, you may also be eligible for an investment tax credit, which is an incentive that can allow you to deduct a percentage of the initial investment costs from your tax liability.