When Congress extended a key tax break for new homeowners, they added in a new tax break bonus for for existing homeowners as well. You can save up to $6500 in taxes if you are in a position to take advantage of this new break.
If you have owned a home for a 5-year period (during the last 8 years), you can qualify for a tax credit of up to $6,500 if you purchase another home before May 1, 2010. The home you buy must be your principal residence. And, because there’s an 8-year look back period, you can still qualify, even if you don’t currently own a home (as long as you did own one for 5 consecutive years sometime during the last 8 years).
You can take the credit either by amending your 2008 return (if you buy a home before the end of this year) or you can take the credit on your 2009 return next year. You’ll also need to attach a signed copy of the settlement statement on your tax return or refund claim.
There are a couple of cautions:
1. The credit isn’t good on homes costing more than $800,000.
2. You can’t buy a house from your in-laws and claim the credit
3. Your dependents, or people under the age of 18 cannot claim the credit.
If you’re a business owner, you know how many valuable tax deductions and savings your business brings to you. And, as a business owner, why not look at your home the same way? Take advantage of the ability to deduct a portion of your home as an office expense, along with a portion of the running costs. Write off a portion of remodeling and decorating costs. Or, create an extra tax-savings opportunity commuting between your home office and your outside office.
To learn more about how your home can work with your business to help save you money, why not join our Coaching Program, launching soon over at US Tax Aid. For just $67 per month, you’ll have access to two monthly coaching sessions, special audio and written materials, and a private forum where you can network with peers, ask questions, and share ideas. Our first session begins on December 8th, at 6pm PST, with a 2-part series on year-end tax saving opportunities.