Tax Credit

Minnesota Home buyers qualify for tax credits when buying a home for the first time. This is a great way to save money on taxes. Your Minnesota realtor is aware of these taxes and can help you determine which you may qualify for. Most of all, your accountant can help you, but you must be sure to notify the person preparing your taxes of the fact that you may have bought a home during the past tax year.

For the upcoming tax year, you may be able to claim certain tax credits if you buy a home this year. Keep in mind, however, that the laws do change frequently, which can affect which tax credits you qualify for or how much of a credit you can receive on your taxes.

First Time Home Buyer Credit

The $8,000 first time home buyer credit has been extended, which allows taxpayers buying their first home to obtain a tax credit that does not have to be paid back. This amount came into effect in 2008, which was up from the $7,500 credit that one had to pay back in 2008. The new laws surrounding the credit says that you do not have to repay the credit as long as you live in the hoe as your primary residence for three years.

For 2010, the home buyer must buy the home on or after April 9, 2008 and have a binding sales contract signed by May 1, 2010 with a closing date before July 1, 2010. There are income limits, such as a single person making no more than $75,000 to $95,000 per year and married couples filing jointly making no more than $225,000 to $245,000 per year.

Non-First Time Homebuyers

There is also a tax credit available to non-first time homebuyers. The maximum amount that can be received is $6,500 and this credit can be claimed if buying a home after November 6, 2009. The home buyer must have lived in their home at least 5 of the 8 years previous to the current purchase.

Minnesota Property Tax Deduction

Home buyers who do not itemize their deductions and is able to increase their standard deduction by $500 if single or $1,000 if married, may have qualified for the property tax deduction. This deduction is available on 2008 and 2009 taxes.

If the deduction is not claimed, but could have been, a tax return can be amended within three years of being filed in order to take advantage of deductions that may not have been taken advantage of. This is one that can be frequently missed.

Minnesota Real Estate

It is important to take advantage of tax credits and deductions as they come about. Even though you may be a first time home buyer now, you won’t be the next time you purchase a home, so there may be tax credits or deductions you can use in following years. Keep that in mind.

If you are looking to buy your first home, call Edina Realty at 763-607-1415 or fill out the form on this page to take the first step toward owning a new home and getting tax credits for doing so.