New Tax Breaks Could Save Tennesseans Money

With tax season on the horizon, new tax breaks could prove valuable to many Tennesseans, given the down economy.

One big change is a tax credit for first-time homebuyers.

IRS Spokesman Dan Boone says it basically amounts to a no-interest loan from the government. The credit amount is 10 percent of a home’s purchase price, up to $7,500 – to be paid back over 15 years.

“Might make the difference in someone being able to purchase a home and get into a home, especially with the economic stresses that are going on right now.”

The First-Time Homebuyer’s Tax Credit is a bit of a misnomer. The credit is available to anyone who hasn’t owned a home in the last three years, but has either bought a home since April or will buy one before July.

Boone says another new credit, the Recovery Rebate Credit, is for people who didn’t receive a full stimulus payment last year. While they may have made too much or too little money to qualify then, if their income has since changed, they could be eligible for the credit.

Boone says the last major change is a real-estate tax deduction. Homeowners who don’t itemize on their tax forms can deduct an amount equal to their real-estate taxes, up to 5 hundred dollars for single or a thousand dollars for joint filers.

For a link to more information on the new tax breaks, click here. Electronic filing opens January 16th.