Taxpayer asks:
Obama is saying he wants to give us tax breaks retroactive to 2008. Should we wait to do our taxes until we see what he is going to do? Thanks,
Taxgirl says:
Don’t wait to file!
The current proposal being offered by the House doesn’t offer any credits or tax breaks retroactive to 2008. Chances are that some variation of that plan will be made law within the next month or two. Under that plan, the credits that may be applicable to 2009 will likely take the form of payroll credits. That means that the only folks that will have to worry about any adjustments on their 2009 (not 2008) tax return will be self-employed or other folks who do not rely on withholding.
But for 2008? Your 2008 taxes will not be affected by any pending legislation.
Remember this: as a general rule, our government moves kind of slow. Okay, really slow. I wouldn’t ever wait on filing taxes or any other life or financial event to see what might happen in the future… That’s like waiting for Andy Reid’s hurry-up offense for the Eagles – it takes much, much longer than it should (yeah, I said it).
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
I’m pretty sure the “new home purchase” section of the pending economic stimulus WOULD BE retroactive to 2008.
Under the economic stimulus bill pass under president Bush, first time buyers (if they bought a home between April 9, 2008 to July, 2009) get a $7,500 tax credit on their 2008 taxes (really, it’s a 0% interest loan that starts getting paid back in 2 years over a period of 13 years).
the pending legislation, as it stands, AMENDS the current tax credit. it could anything from making it permanent (no payback required) or INCREASING the amount, or extending to ANYONE who bought a home during the SAME PERIOD (because they are, as it stands, planning on AMENDING the Bush credit, not issuing a new one).
so, if you bought a home after april 9, 2008 (and before december 31, 2008), you could get more money back (in theory). That is not to say someone should wait to file, but you could, in theory be eligible for a much better housing credit.
Thank you, Tax Girl!
John,
I’m certainly hoping that you are correct in your theory of the Housing Credit being retroactive to 4/9/08. I keep looking for similar information but have read only a few posts referring to this. May I ask where you found this information? Most state that housing purchases will only retro to 1/1/09.
Thanks!
I have a question about the housing tax credit that is currently going through congress? I bought a house in December of 2008 and under the current tax credit I will receive the $7500 for first time home buyer, which is basically a interest free loan. I have heard all over the news about the $15000 tax credit (no repayment) that is likely to passed with the new economic package? I have not filed my taxes yet, should I wait until this law is passed? Any advice on this would be greatly appreciated…thanks!
I rarely recommend waiting for laws to be passed and amended before filing your tax returns… It can take forever – and the final bill may be very different from the current one. You can always amend your return if the legislation affects you.
Hey tax girl, I just bought my first home but i already filed my taxes. What exactly do i need to do to file a amendment to my return?
File a form 1040X. It’s not difficult to amend a return – the instructions are available at http://www.irs.gov. You’ll just update with the housing info (form 5405).