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Old 02-06-2009, 12:11 PM
 
14,818 posts, read 18,836,041 times
Reputation: 11777

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Quote:
Originally Posted by Kootr View Post
Sorry, I misunderstood that you were entitled to a $1k refund on your Federal taxes. You are correct - you would receive $16,000.
I should give you some neg. rep for scarying the s..t out of me,
I thought you were saying people would only get money if they owed taxes to the government and they would only get that amount.

Holy crap, that had me scared, because I always get money back.
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Old 02-06-2009, 12:19 PM
 
Location: Casa Grande, AZ (May 08)
1,490 posts, read 3,345,698 times
Reputation: 1160
Dopo,

What happens (if this is just a simple tax credit) is lets say they take 8000.00 out of your pay in a year, but your actual tax liability at end of year is only 7000.00, you will get all 8000.00 back, whereas now you only get the 1000.00 you overpaid. BUT, you will not get "extra" money.

This is different than the credit currently in place. I did get the "extra" $7500.00 as a refund even though I didnt owe nearly that much in taxes for 2008. BUT, I have to pay it back over 15 years.
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Old 02-06-2009, 12:35 PM
 
1,628 posts, read 5,778,672 times
Reputation: 1221
Quote:
Originally Posted by boilrmkr View Post
No it doesn't. This is a non-refundable tax credit. If you paid $5000 in taxes last year you will get that back. That's it. It isn't a $15,000 gift from the government. It credits the amount you paid last year so you now get back what you have paid out nothing more.
Is there an income cap on this? So anyone making over $xyz is not entitled to this credit (as has been the case with most of these refunds, credits, etc)? Anyone know?
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Old 02-06-2009, 12:46 PM
 
433 posts, read 1,540,027 times
Reputation: 168
Quote:
Originally Posted by frogandtoad View Post
Is there an income cap on this? So anyone making over $xyz is not entitled to this credit (as has been the case with most of these refunds, credits, etc)? Anyone know?
No income restrictions.
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Old 02-06-2009, 12:55 PM
 
706 posts, read 2,852,079 times
Reputation: 1013
Quote:
Originally Posted by boilrmkr View Post
No it doesn't. This is a non-refundable tax credit. If you paid $5000 in taxes last year you will get that back. That's it. It isn't a $15,000 gift from the government. It credits the amount you paid last year so you now get back what you have paid out nothing more.
Beats an earned income credit, or being paid not to work, but it's a pretty good disincentive for contributing to 401Ks. Seems like the ideal thing to do is pare down my retirement contributions to get my tax liability to 7500 a year.

Tough for a first-time homebuyer to accurately estimate the tax deductions of owning a home, and either reduce tax withholdings and IRA contributions, or potentially leave money on the table at tax time!
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Old 02-06-2009, 01:35 PM
 
943 posts, read 3,720,031 times
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[quote=ji603;7350693]Beats an earned income credit, or being paid not to work, but it's a pretty good disincentive for contributing to 401Ks. Seems like the ideal thing to do is pare down my retirement contributions to get my tax liability to 7500 a year.

Tough for a first-time homebuyer to accurately estimate the tax deductions of owning a home, and either reduce tax withholdings and IRA contributions, or potentially leave money on the table at tax time![/QUOTE

If this is the way the bill, then if someone purchases a home that has a low income ($40,000 or less), but high savings would be the loser in this equation.
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Old 02-06-2009, 01:46 PM
 
Location: West, Southwest, East & Northeast
3,446 posts, read 6,454,729 times
Reputation: 867
Quote:
Originally Posted by boilrmkr View Post
No it doesn't. This is a non-refundable tax credit. If you paid $5000 in taxes last year you will get that back. That's it. It isn't a $15,000 gift from the government. It credits the amount you paid last year so you now get back what you have paid out nothing more.
You are absolutely correct. I was told wrong by the Senator's office staff.

The tax credit only applies to what the taxpayer owes. There is a 2 tax year window in which the tax credit can be used. It is NOT A CASH REFUND. Thus, if you owe $5K in taxes the tax credit reduces your taxes to zero...and the balance of the tax credit is carried over one more year. There is NO CASH REFUND.

Last edited by Kootr; 02-06-2009 at 02:40 PM..
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Old 02-06-2009, 02:06 PM
 
943 posts, read 3,720,031 times
Reputation: 419
Quote:
Originally Posted by Kootr View Post
You are absolutely correct. I was told wrong by the Senator's office staff.

The tax credit only applies to what the taxpayer owes. There is a 2 tax year window in which the tax credit can be used. It is NOT A CASH REFUND. Thus, if you owe $5K in taxes the tax credit reducess your taxes to zero...and the balance of teh tax credit is carried over one more year. There is NO CASH REFUND.

So the way to beat the system would be to sit down with your tax advisor and figure out a way to set your paycheck to owe otherwise a middle class earner like me that gets back about $1000 on average when I file would not benefit from this. I can't wait till this is sorted out it is very confusing, 14 pages and still no consensus on this forum.
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Old 02-06-2009, 02:26 PM
 
2 posts, read 9,708 times
Reputation: 10
I started building a home in june 2007 and are expecting my final inspection this month so I was interested in finding out if I will be able to quilify for this credit. I spent around 180,000 building my house. Do you think it will apply to me?
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Old 02-06-2009, 02:29 PM
bcm
 
5 posts, read 20,351 times
Reputation: 11
Quote:
Originally Posted by ogplife View Post
So the way to beat the system would be to sit down with your tax advisor and figure out a way to set your paycheck to owe otherwise a middle class earner like me that gets back about $1000 on average when I file would not benefit from this. I can't wait till this is sorted out it is very confusing, 14 pages and still no consensus on this forum.
I agree 100%. I am SO confused...
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