First time home buyer tax credit of up to $8,000
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OH, they actually GIVE them the 8 grand?
I thought it was a credit, not a refund - much the same as you get a ‘mileage credit’ to be used to work off of your Gross.
No wonder we are broke - ‘giving’ money away rather than extend a credit ... I guess I am going to have to start paying attention.
That should really keep my BP in the high range....
A tax credit is different from a tax deduction. The first comes off the amount you owe, the second comes off the amount you earned.
If you owe $8K then you now owe nothing. If you owe nothing, they give you $8K.
If you think about it, it does make sense if the concept of a tax credit is to exist at all (which is debatable). Imagine Person #1 sets up his W-4 to have too little deducted, and at the end of the year he owes $8K. But he has this tax credit, so he owes nothing, the government effectively gave him $8K to pay off his taxes due. Person #2 has his W-4 set up to even out to nothing owed or due at the end of the year. He gets this tax credit and -- what? Both have the same tax credit, but the guy who does his W-4 right gets nothing?
I thought it was a credit, not a refund - much the same as you get a ‘mileage credit’ to be used to work off of your Gross.
That's a deduction.