The new economic stimulus plan that became law recently gives first time home buyers a tax credit up to $8000. According to the new rules, you have to buy your first home between Jan. 1st and Nov. 30th, 2009, or have had no ownership interest in a home for the last 3 years.

You will still need to come up with your down payment first; however, if you borrow that money from, oh I don’t know, lets say a relative or perhaps a loan shark or better yet a credit card company. You will be able to pay it back (not including interest of course) with the monies received when you file your tax return and claim the $8000 as a tax credit. Home buyers this year can receive $8000 without any obligation to repay the money as long as they live in the home 3 years.

And if you buy a home soon, you can receive your $8000 quickly by claiming it on your 2008 tax return. Even if you already filed your return, you can still claim this credit for 2008 by filing an amended return with form 1040X. If you plan to buy a home later this year, you have 2 choices: request an extension for your 2008 taxes and claim it when you file by Oct. 15th or claim it when you file your 2009 return.

At this point I need to confess I’m not a CPA. So please consult your Tax Consultant. If he/she likes the idea remember where it came from.

I’ll file this under: I hope I don’t get sued today.

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