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2	Music The famed Mexican rock band, Jaguares, scores its first Grammy; La Quinta Estación releases a new album; the many faces of Señor Coconut; Cucu Diamantes shines. read more...
3	Ask Julie Tax benefits of new home purchases. read more...
4	Calendar Noteworthy Hispanic events around the country in April. read more...
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Ask Julie

First-time home buyers have two opportunities to put money in their pocket this year

Who qualifies?
For IRS purposes, you are considered to be a first-time home buyer if you, and your spouse if you are married, did not own a primary residence during the three-year period ending on the date of purchase.

what’s your tax-credit?
The credit is calculated by taking 10 percent of the purchase of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing a joint return. For example, if you purchased a home valued at $70,000, your credit would be $7,000. But the home cost $300,000, your credit would be capped at the $7,500.

Restrictions you need to know:
• You will have to live in the property and it must be located in the United States.
• You must have bought the home after April 8, 2008, and before December 31, 2009.
• You must begin to repay the tax credit the second year after claiming it. For example, if you were eligible for the maximum available credit of $7,500 and you claimed it on your 2008 tax return, you must begin to make payments of $500 (one-fifteenth of the credit received) as an additional tax on your 2010 federal tax return and every year thereafter until the total amount of the credit is returned. This is the equivalent of having a 15-year interest-free-loan from the government.
• If you die, the balance will be forgiven unless you filed a joint return, in which case your surviving spouse would be responsible to continue payments.
• If you do not remain in the property, all remaining annual installments become due on the tax return for the year that you do not occupy the home. The same applies if you sell the home while making payments.
• If the property is transferred to one of the spouses as a result of a divorce, the owner-spouse will be responsible for all the outstanding payments
• According to the IRS, resident aliens with an ITIN (a tax identification number for those who do not qualify for a Social Security number), are also eligible to benefit from this credit.
Who does not qualify?
• You are excluded from claiming this credit if your annual income exceeds the phase-out range of your adjusted gross income: $170,000 for joint filers and $95,000 for all others.
• If you buy your home from your spouse, parent, grandparent, child or grandchild

What if you didn’t buy in 2008 but are planning to this year?
Your tax advantage may become even more attractive since you may qualify for a tax credit that you do not need to pay back.
This year, the amount of the 10 percent credit goes up to $8,000 for joint filers and $4,000 for all others for those qualifying taxpayers who buy a home before December 1, 2009. You can claim your credit on either your 2008 or 2009 tax returns. The phase-out amount begins at $75,000 for single filers and $150,000 for couples filing jointly.
Note: The tax credit available in 2008 applies for purchases from April 8, 2008 to July 1, 2009. However, first-time home buyers who purchase a home in 2009 can choose between the two tax programs, the old repayable loan, or the new genuine tax credit. Tough choice? I don’t think so.