Well IMO the IRS wants us to think it is a safer bet, but just because it has always been there, doesn't mean it always will, and besides why would someone want to pay in money interest free for Uncle Sam to use for a whole year anyway? It's better to closely figure your tax, withhold enough to cover it, and then use YOUR money to pay on debts that you owe, especially those with interest... which is most debt
I do not know if this new credit will be able to be taken all in one shot or if it will be able to be used over several years. Here's how our adoption credit with the IRS worked, assuming the housing credit is the same way, at least this is a scenario. She really should talk with a CPA or tax attorney before buying a house DEPENDING on the credit.
We spent 20,000 to adopt 1 qualifying child. The fed had a credit for I think 10,000 at that time, (I think it might be a little more now)
The thing is you don't just GET the money. It is a credit that you use for your tax liability. So we were poor enough, that most years we only owed 2,000. That means we were able to carry the credit over to the next year, using 2 or 3000. It took several years to use all of the credit for us, because we owed so little tax anyway. (I was actually talking about a STATE credit in my previous post, which was different for us because we SOLD the credit at 75%. We owe so little in state tax, we would not have been able to utilize the full amount before the time expired on it)
That is the other option the poster MAY have, if she couldn't use the credit herself for whatever reason, can it be sold?
She REALLY needs to talk to someone who KNOWS more details about the credit she is wanting to use, BEFORE making a decision that would be depending on a credit that may turn out to be a ghost for her.
Many people make little money to begin with, have several children to claim a credit on, ect, by that time this 'credit' may not really be a benefit to them as they thought it would be.
It is a credit, not a refund. You don't get the money back, unless you paid it to begin with. NOT paid it on the house, but paid it on your taxes. (or you can use it to pay your taxes if you didn't pay into it during the year)
What we did on our Fed is file exempt since we knew we had a credit that was working for us. Then at the end of the year, we used the credit to pay the tax we owed. Plus then we got a refund of 3,000, because we had 3 children that qualified as dependents.
Everyone's tax situation is different.
There is also a toll free number and a website for the IRS that you can call to get information. I have called it before and got good results. Be sure you write down the Badge ID of whoever you talk to, the date and time. Keep a log of what they tell you.
There are also state offices to call if you have questions about state tax issues. If the IRS is offering a credit to first time home buyers, some states may follow that up with a state incentive of some kind as well. Never hurts to call and ask.
I never go to those H&R block type things, like at Walmart and such. Those people are ok to do BASIC tax forms (really most people could it themselves) But if you have credits, or any kind of business, or itemize, you should find someone more reputable. I called around about my adoption credit and NO ONE even knew what I was talking about when I told them I wanted to sell it. I ended up finding a tax attorney 4 hours from me that said 'oh, sure, no problem' and proceeded with language that let me know he had did that before. Cheap, fast, chain tax preparers can cost you a bundle if they do not know what they are doing. Not to mention the headache a couple years from now, when you try to straighten out the mess. IMO best to avoid those types. Look under the Yellow pages and find someone that has been in private business for awhile, or just ask around to find someone that is recommended.