When was the last time anyone offered you $8000 to buy a home???  Well, here it is folks.  The American Recovery and Reinvestment act of 2009 provides an $8000 federal tax credit for first time buyers who have not owned a home within the last three years.  Purchasers who close on a principle residence between January 1, 2009, and December 1, 2009 are entitled to a tax credit equal to 10% or a maximum of $8000.

Keep in mind, this is NOT a tax deduction, but an ACTUAL CREDIT paid to you from the federal government.  If you owe $2000 in taxes at the end of the year, you will receive a check for $6000.  Conversely, if you are owed $2000, you will receive a check for $10,000.

Time is running out and with the current delays in obtaining financing through most lending institutions and the lack of inventory in many areas, it is imperative to secure a property into contract by no later than October 15, 2009, to have a chance at getting your piece of the stimulus package.

Since I cannot give you direct tax advice, always confirm any tax information with a qualified specialist such as a CPA or EA.

Click image for larger version

Here are some of the ways to use your $8000 tax credit:

1. Go on a cruise or second honeymoon to Venice Italy
2. Improve that tired bathroom you’ve been meaning to for years
3. Take almost 4 ½  years worth of piano lessons
4. Buy over one year’s worth of groceries for your family
5. Purchase a really cool motorcycle
6. Fly to Paris for lunch 5 times
7. Try your luck in Vegas without caring
8. Take eight friends on an exotic scuba diving excursion
9. See how many live sports events you can attend until the money runs out
10. Buy a small experimental airplane and an insurance policy for your spouse

Resources for tax credit buyers:

www.irs.gov/pub/irs-pdf/f5405.pdf

http://taxes.about.com/od/deductionscredits/qt/homebuyercredit.htm