Financing

Repaying the home buyer tax credit.

Back in 2008, taxpayers were offered an $8,000 credit to entice them to buy a home and spur sales. Those who claimed the credit have 15 years to repay it. It was basically an interest-free loan originally and, later on, it changed in 2009 to a $7,500 credit you didn’t have to pay back. But for 2008 buyers, repayments started in 2010. The IRS no longer sends out reminder letters to taxpayers about how much they owe. But a new new online tool can help you figure out the amount due on your tax bill if you took the credit. To repay the credit, you add the amount of this year’s payment to any other tax you owe on your federal return. You could get a smaller refund or even end up owing the IRS. (Note: There are some people who must repay their first-time homebuyer credit, even if they bought it after 2008. If you sold the home or stopped using it as your main home, you have three years from the date of purchase to repay the entire credit.)

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