| The first two installments of this series defined | | | | home buyers. The credit is still 10% of the |
| deductions and credits, and looked at | | | | purchase price and is phased out for incomes |
| non-refundable tax credits. And with what we've | | | | over $75,000 ($150,000 if married). And there's a |
| covered so far, it's easy to see how thoughtful | | | | bonus: a first time homebuyer is anyone who has |
| planning, self-improvement and a good accountant | | | | not owned a home in the last three years - it |
| can reduce - or even eliminate - your tax bill. | | | | doesn't really mean your first home purchase. |
| Today, let's take a closer look at refundable tax | | | | 2. Recovery Rebate Credit If you missed the |
| credits. | | | | 2008 stimulus check, you might be in luck. The |
| In Part 2, we saw how non-refundable tax credits | | | | Recovery Rebate Credit may be available if you |
| reduce your tax bill, but they don't give back any | | | | fall into one of these categories: |
| extra. | | | | 3. - You gained an additional qualifying child in 2008 |
| The best kind of credit is the refundable tax | | | | 4. - Someone claimed you as a dependent in |
| credit. It reduces your tax bill, AND increases your | | | | 2007, but you will file independently for 2008. My |
| tax check. For example, if you have a tax bill of | | | | daughter Arielle was a dependent college student |
| $1,000, and a refundable tax credit of $1,500 - | | | | for 2007; now she is working and will not be a |
| you get a $500 check from our now dear Uncle | | | | dependent for 2008.This means my "Baby" girl |
| Sam. | | | | gets an additional $300 for this credit (Do you |
| Here are three refundable tax credtis you can | | | | think she will pass some back to Dad?). |
| take advantage of: | | | | 5. - You didn't have a valid Social Security Number |
| | | | in 2007, but got it in 2008. |
| 1. 1st Time Homebuyers Tax Credit Get this one | | | | 6. Earned Income Tax Credit (EITC) This much |
| while it lasts. It has two periods. The first period | | | | maligned credit may come in handy this year if |
| ran from April 9, 2008 until December 31, 2008. It | | | | you saw a substantial drop in income, or your |
| offered a $7,500 interest free loan from Uncle | | | | income was up to $ 41,646 for a couple filing |
| Sam. This credit is for 10% of the purchase price | | | | jointly with two children. This credit can be for as |
| of your home purchase (up to $7,500). The credit | | | | much as $4,828 with two eligible children. . EITC is |
| is repaid over a 15 year period, with repayment | | | | based on income and dependents and is the most |
| beginning in the second year after receipt of the | | | | widely used IRS credit. Just don't run out and |
| credit. The new Stimulus Plan added another | | | | "rent" some kids to get it! That's the reason this |
| period from January 1, 2009 until December 31, | | | | credit is maligned. |
| 2009, changed the plan from a loan to a gift and | | | | This wraps up our series on tax deductions and |
| increased the limit to $8,000. That's right, Uncle | | | | credits. |
| Sam is giving away up to $8,000 to first time | | | | |