$7500 First Time Homebuyer Credit

Not many people are aware of the $7500 tax credit that that IRS is offering toward the purchase of a new home. The first-time homebuyer is a refundable credit of up to $7,500 that applies to home purchases after April 8, 2008 and before July 1, 2009. This means that the credit will be paid out to eligible home buyers, even if they owe no tax or the credit is more that the tax owed on your return.

This credit works like an interest free loan. If you qualify, you will receive the $7500 as part of your 2008 tax return. The repayment begins in the second year after you receive the money. So you would begin paying it back starting 2010. The repayment period is 15 years and the payment comes out of your yearly tax return. So if you receive the full $7500 you would pay back $500 out of your tax return for the next 15 years.

To qualify for the credit you must meet the following requirements:

• You must purchase your home after April 8, 2008 and before July 1, 2009.
• The home must be your main home, the one that you live in most of the time
• To qualify as a home, it must include sleeping, cooking, and toilet facilities. A home can be a house, condominium, cooperative, mobile home, house trailer, boat, or similar property
• Your adjusted gross income with a few changes (also known as your modified adjusted gross income) must be less than $95,000 if filing single or less than $170,000 if married filing jointly. You qualify for only part of the credit if your modified adjusted gross income is between $75,000 and $95,000 if filing single (or between $150,000 and $170,000 if filing jointly)

You can’t claim this credit if you:

• Owned a main home at any time in the prior three years preceding your purchase
• Purchased this home from a family member, including your grandparents, parents, spouse, children, or grandchildren.
• Stopped using your home as your main home.
• Sold your main home before the end of the year.
• Are a nonresident alien.
• If you ever took or were eligible to take the District of Columbia first-time homebuyer credit for any taxable year.
• You financed your home from any source that uses tax-exempt mortgage revenue bonds.

I don’t qualify for the credit, however I wanted to see how this worked in TurboTax. I answered the questions like I was a first time homebuyer and sure enough my refund increased by $7500. Not a bad way to receive an interest free loan that you can payback over time. And the fact that the repayment is taken out of your tax returns makes this very hassle free.

I strongly recommend that if you bought a home since April 8 and you fit the qualifications you should definetly jump on this one.

See IRS Publication 530 for more detail.

Lose your job? Then return your Hyundai!

Hyundai Motor America in a bid to get people to buy more cars in this slumping economy will let you return your newly purchased vehicle if you become unable to make your car payments.

I can’t find when this deal became effective, but it is currently running now as I talked with a Hyundai car salesmen this weekend about it.

Basically if you buy or lease a new car from Hyundai, if you fall on hard times within the first 12 months of ownership, the automaker will cover the depreciation on any returned vehicle. This assumes you have been making payments up to the time you decide to return the vehicle.

Customers must also have made at least two payments on the car already. In addition, Hyundai will only refund the depreciation on the returned car up to $7,500.

They didn’t exactly tell me how they determine if you can’t pay your car payment, but the salesman did say they will require proof of job loss or other financial hardship. So don’t plan on buying a car to drive for 12 months then give back!

After the first 12 months, customers have the option of extending the program for a fee through their dealership. Customers who pay cash for their car don’t qualify for the program, Hyundai said. So this appears that you must use their financing arm when buying the car.

This isn’t a bad deal if you are worried about your job. Worst case you are at least paying $7500 for use of the car for one year if you were to give it back at the 12 month mark. Only time will tell how this deal pays off for Hyundai, but hopefully it will help out a few of us that are struggling to make ends meet and are even more concerned about what the future will bring.

Visa Black Card for When Gold Just Won’t Do

There is a new elite credit card out on the market. This time it isn’t American Express that is offering it. Barclays Bank Delaware in partnership with VISA are offering what they are calling the Visa Black Card. These elite types of credit cards go the extra mile for those that are willing to pay for it.

They claim on the card details page that this card “is available to only 1% of U.S. Residents to ensure the highest caliber of personal service is provided to every Cardmember”. It doesn’t really explain what credit score or annual household income you need to qualify, but I am assuming that if they are only issuing this card to 1% of the US it must be a very high number.

Some of the perks of the card include:

• Limited Membership
• 24-Hour Concierge Service
• Rewards Program – 1% cash back on all purchases
• Luxury Gifts
• Access to more than 500 airport lounges in over 90 countries worldwide

The concierge service, which looks pretty interesting, offers the following services:

• Entertainment Planning – information and reservations for restaurants, health clubs, sproting events and golf tee times
• Business Services – conference and translation services, message services and computer, A/V rentals
• Travel Information & Assistance – hotel, fliight mass transit, car rental info and reservations. ATM and weathe information
• Country & City Information – sights/entertainment, tourist and shopping info
• Gift Arrangements (The one I would use the most) -Gift baskets, Floral arrangements, Specific gifts (as requested), Special occasion gift recommendations
• Specialty Services – Assistance with location and purchase of specialty items.

All of these features come at a price, however, in the form of a $495 annual fee. The card design is pleasing to the eye especially when compared to my current cards that are in my wallet. If I had $495 a year to drop on this for the annual fee I would definetly sign up for this as some of the concierge services would come in handy since I travel quite a bit for my job. These elite cards are not for everyone, but if you have the cash, the VISA Black Card is definetly worth a look.

Happy Holidays!

Everyone here at Budgetcents wishes you and your family a joyous holiday season! We will be back after Christmas with more Credit Card, Bank and Brokerage deals to help get a little cash in your pocket!

Thanks for being a reader!

Advanta Mastercard 90 Days No Interest Forever

Advanta has come out with an interesting new Net 90 Mastercard which defers the interest for 90 days on charges. This is not an introductory offer and applies to all purchases.

To put this in perspective most cards give you 30 days from the beginning of the statement until you need to pay for the charges you make. Having 60 more days with no interest makes things interesting since you can float all those charges and earn interest on that money by putting it in a high yield savings account rather than having to pay the bill each month.

If you get on a cycle of paying for your charges 90 days later, each month you are floating 2 months worth of charges. You could potentially save quite a bit of money in interest by doing that. Just to make sure you track your purchase and when they need to be paid off! You don’t want to get caught in a rut of paying interest every month.

Some other benefits other than the 90 days no interest are a cash back rewards program as well as no annual fee.

This is a business card, but you can apply as an individual. See the application page for more details.

Free Turbotax For State Farm Customers – 2008 Tax Year

Once again State Farm is giving away Intuit’s Online TurboTax Free to its customers. They have done this for the last 2 years and it has been very successful. This year is a bit different however. This year you can only get access to the free Tubotax by having a State Farm Bank product added to your online account. Just having a State Farm insurance product isn’t good enough. State Farm bank offers products such as Credit Cards, Savings/Checking accounts and CD’s.

One easy way to get this is to sign up for a State Farm Credit Card. They have no annual fee and once you get your card you can setup access to get onto the State Farm Portal. Once you log in, you will see the following “File Your Taxes For Free” link.

Once you click through that link you will be directed to the TurboTax site with their online product listing and fees. Notice that only TurboTax Basic and Deluxe are Free, however the Premier and Home & Business versions are severely discounted.

Also note that it says “State Additional”. They said that last year too but there was no charge once you completed your taxes. As I get closer to filing my 2008 taxes, I will update this post to verify that the state filing fee is in fact free.

The online version of TurboTax does not require any software install on your part. Everything is kept online securely and is available to print out anytime even after you file your taxes. All your data from the previous years is carried forward to help reduce retyping all that data every year. I have used it for the past 3 years and have had no complaints. One advantage of the online version versus the desktop version is that you get immediate updates. No more waiting to download federal and state updates!

Also be sure to remember that if it takes you a few sessions to complete your taxes, be sure to get into TurboTax through the State Farm link each time. There have been reports that you only need to go through the State Farm link the final time before you file, but just to be safe I would always use the link each time you need to go back in.

If you don’t have any State Farm accounts, Turbo Tax has pretty decent rates to file your taxes (See the TurboTax site for details.) I have used quite a few online tax preparation sites and in my opinion Turbo Tax is definitely the best way to go.

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