$8000 Tax Credit Extended, Unemployment Rises over 10%

By Mike Rowan, 11/07/2009

$8000 1st Time Home Buyer Tax Credit Extended Through May

The $8000 First Time home buyer tax credit is one of the many year end financial planning tools that we have been encouraging our readers to take advantage of. However, there has been a change in the tax law, which passed on November 6.

The First Time Home Buyer Tax Credit has been extended to April 30, 2010.

The $8000 tax credit has been very successful in encouraging those people who were former renters to take the plunge by becoming home owners. As a result, it has helped to stem the rash of foreclosures which has thrown the economy into shambles over the last year, with over 1.4 million taking advantage of the program

However, there are a few differences in the new home buyer tax bill. The new bill includes an credit for current home owners as well. The government will offer those buyers an incentive of up to $6,500 provided they've lived in their home for at least five of the past eight years.

The credit can only be claimed on primary residences purchased for less than $800,000. And as long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back. Furthermore, buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return.

Here's a quick recap of the extension's new guidelines:

Home Buyers who have owned their current dwellings for at least five years would be eligible, for tax credits of up to $6,500.

Like the previous bill, first-time home buyers — defined by people who haven't owned a home in the previous three years — could a tax credit up to $8,000. To qualify, have to sign their purchase agreements before May 1 and close the transaction before July 1.

Unemployment Hits 10.2% as Job Losses Continue

The U.S. unemployment rate jumped to 10.2 percent in October, breaching the benchmark double-digit barrier for the first time in 26-1/2 years, though the pace of job losses slowed.

A Labor Department report released on Friday showed that employers cut 190,000 jobs in October, more than the 175,000 markets had expected. Economists had looked for the jobless rate to rise to only 9.9 percent from 9.8 percent the prior month.

In addition, the government revised job losses for August and September to show 91,000 fewer jobs lost than previously reported.