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Exactly~!
This 15k would go into my new house that im buying next wed.
New floors , appliances , paint, water softner etc etc etc.
All pumped right back into the economy it self. I dont see how that would be a bad idea.
Here is an excerpt from the Bloomberg article.
"Unlike the current law, the $35.5 billion provision wouldn’t be restricted to first-time homebuyers. It also would end homebuyers’ ability to claim the full credit if it exceeds the amount they owe in taxes.
The effect would be to wipe out the $15,000 income tax a family of four earning about $122,000 would otherwise owe this year if they bought a house. . . . Instead, the Senate provision would allow homeowners to split the $15,000 into two separate tax credits of $7,500 to be taken in successive years "
Sounds to me like you will get the money back and it's not just a credit that reduces a percentage of your taxes.
Let's clear up some confusion on what refundable tax credits, tax credits, and tax deductions are...
A REFUNDABLE tax credit is treated like extra with-holding taken out of your paycheck throughout the year. Therefore, the $7,500 new home buyers credit added $7,500 to the amount with-held by your employer for federal taxes. That meant you could receive a higher refund than what you actually paid in. (A more familiar example of a refundable tax credit is the earned income tax credit).
A non-refundable tax credit is a credit on a dollar-for-dollar basis against your tax liability. It reduces the amount of tax you owe. BUT if your tax liability reaches zero, it WILL NOT give you money back. If you normally owe $5,000 in taxes and get a $15,000 home buyer credit, assuming it passes, you will have your tax liability reduced to $0 instead of $5,000. The other $10,000 has no effect (in the current year anyway)
A tax deduction is entirely different (and neither the home buyer credit or new home buyer credit is this BUT the interest deduction on your home is this): It reduces your taxable income. To simplify this (the real tax code is a bit more complicated), if your taxable income is normally $100,000 and you pay 25% and had a $10,000 deduction, instead of paying 25% on the entire $100,000 you will instead pay it on the $90,000. So really it saves you 25% on the 10,000 (or $2,500), not $10,000.
There you go... And our tax system is 1,000,000 times more complicated than this in reality which just goes to show you how much we need to simplify it!!!