Be Prepared for Changes When Filing Taxes

By: Kieran Wilson Email
By: Kieran Wilson Email

The economy has fueled legislation that hopes to help people recover from financial slumps and it means some changes on this year's tax returns. Many of the changes have been generated from the current housing crisis.

The changes start with a first–time home buyer tax credit for anyone who purchased a home after April 2008 and before July 2009. The credit is a refundable amount of 10 percent of the homes purchase price or a maximum of $7500; but there's a catch. CPA Danny Bresnahan with Eide Bailly says, "It’s a unique credit in that they have to pay it back in equal installments over 15–years." So if the full amount is given the home–buyer would be paying back $500 a year for the next 15 years.

For those whose homes were foreclosed this year, they may get a little relief as part of the mortgage forgiveness debt relief act. Under this new rule, if the bank cannot sell the house for enough money to cover its original loan, the loss does not have to be claimed as income.
For homeowners close to paying off their mortgage will see another option. Instead of itemizing, there is a new standard deduction.
Bresnahan says, "if they didn't have enough to itemize they can get an additional standard deduction; If its an individual they can get 500 dollars and if it's a married couple filing together its an additional $1000."

From the money invested in your house to the money the government put in your pocket, you may be entitled to more money from last year's stimulus check. Single people were supposed to get $600 and married couples filing jointly were supposed to get $1200. Bresnahan says, "if you didn't get the maximum and some of the factors change on your 2008 return you could get a credit in the difference of what you should have received."


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