Wait…I have to pay that back?

April 16, 2009

As is our annual tradition, Tim and I sat down with his dad (a CPA) the night before Tax Day to file our extension. We somehow can’t seem to ever get our taxes out on time. Ya know, when I was single my taxes were done by mid-February and I had my refund by mid-March. Hmmm…oh well. That’s a battle I chose not to fight. Ha! Anyway, I digress.

So we are doing the preliminary work of filing the extension when we get to the part about the tax credit for first time home buyers for 2008. With the market going down, Tim and I took advantage and bought our house. Apparently, if you bought a house in 2008 for the first time, the government will give you at $7500 tax credit. I was pretty excited until we read the fine print in the over 1,000 page tax code for 2008. Yes, we would get the tax credit this year, BUT we would owe the government $500 a year for the next 15 years until it was paid off. And if we were to sell the house before that 15 year period, we would owe the entire amount that was yet unpaid back to the government! So you mean to tell me that my house will be paid off in 5 years, but I would still owe the government for another 10!?!? No thank you . You can keep your damn money. Only people in Washington could have thought this one up. Calling it a tax credit and then burying the fine print of repayment on page 856 of the tax code seems a little more than skeezy to me. And they are calling mortgage companies predatory lenders? Pot, meet kettle.

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2 Responses to “Wait…I have to pay that back?”

  1. hthr Says:

    Huh. I wonder why this payback part isn’t reported on the news!? Grr.

  2. Marcy Says:

    UGH! Typical – thanks for doing the legwork on that one for us…I would’ve hated not to know about that going into the buyers’ market!

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