About that $15,000 tax credit

I recently posted about the proposed $15,000 tax credit for homebuyers.  Something that you all should note* is that this credit is not refundable.  The current $7,500 interest free loan from the government is, but the $15,000 one will not be.  However, you may be able to take the credit in 2008 and 2009.

As it is not refundable, you cannot get more tax back than you've paid.  Say that you are married and made $100,000 last year.  Your tax liability would be about $13,000.  So you would only be take the credit for $13,000 for the 2008 taxes.  In 2009, you would be able to take the rest of the balance ($2,000).  Those taxpayers who are in the lower quartile would not see much benefit from this, but they probably should not be buying a house.

If you have already filed your taxes for 2008, there is a form called the 1040x that allows you to modify your previously file return, up to 3 years down the road.

*I am neither an attorney, nor an accountant.  If you use my advice and get in trouble, don't blame me.