Questions for the Tax Lady: August 10th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an e-mail, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Do you know if the government is planning to do any type of first time home buyer tax credit next year like they did this year?

This is a very tricky question to answer because no one really can predict exactly what changes Congress will make to the tax code. Currently to be eligible for the credit you must purchase a home before December 1^st, 2009 and there has not been any serious mention of extending. Additionally, as signs continue to roll in that the housing market crisis is leveling off, funding another huge tax credit tax credit for home buyers probably is not the Federal government’s top priority.

Question #2: If I sold my house in 2007 will I be eligible for the first time homebuyer’s credit?

No. Unfortunately, the credit is only available to taxpayers who did not own a home three years prior to the closing date on the new home. However, if you do buy a house you will be eligible to deduct some of your closing cost, points, fees, etc., and remember that you can also deduct your mortgage interest.

Question #3: How do I know if my car qualifies for the Cash for Clunkers rebate?

First of all in order to qualify for the Cash for Clunkers program you need to have a clear title, and have proof that you were both the registered owner and had insurance on the vehicle for one full year. The program also only applies to a specific list of cars. Click here to download a PDF from Cars.gov of the vehicles that qualify.