Earlier today, the IRS officially began accepting 2008 electronic tax returns for individuals claiming the $8,000 tax credit for qualifying first time home buyers who purchased a house in 2009. If you qualify and have purchased your home this year, you can now file your taxes using TurboTax, TaxAct, H&R Block, or any other software vendor. Previously, if you attempted to claim the $8,000 tax credit on-line, the IRS would have rejected your return.
Note that if you plan on buying a house later this year before December 1, you still qualify for the tax credit, but you cannot claim it yet. Either file for an extension or claim the $8,000 credit when you file your 2009 taxes. If you’re expecting a big refund this year and you don’t want to delay that refund by filing for an extension, you can file now and file an amended return later.
The maximum credit of $8,000 ($4,000 for those who are married filing separately) is limited at 10% of the purchase price of the house, and the total credit you qualify for begins to phase out for taxpayers with a modified adjusted gross income of $75,000 or $150,000 for joint filers.
Here are the full details about claiming the $8,000 first time home buyer tax credit this year.
A few weeks ago I wrote a short piece explaining that while even if you think the “Making Work Pay” tax credit of $400 is a bad idea, at least we’re saving money this time by not sending out two letters and a check to every household in America. In short: the stimulus process could’ve been dumber.
In the comments of that article, Laura said:
Yes but now the government will have to reprint and mail out the employee withholding schedules that small employers use to figure up those weekly paychecks. This is why it will take a few months to see that $13. It goes both ways.
I wasn’t sure if Laura was correct about that. I work for a small company, so I figured I’d wait and see.
This morning, my co-workers and I saw our Federal Withholding decrease for the first time as a result of the “Making Work Pay” tax credit. My personal take-home pay is $33 more (we get paid twice a month).
So I asked our Accounting department about the process, and I got this in reply:
It’s actually a change in the Withholding Table. The Table is downloaded from the IRS electronically and then based on your W4 elections and pay scale, the amount will automatically adjust.
Granted, there are probably some companies who don’t do everything electronically, and as a result might need a paper form to be sent, but in our case, and I suspect most other companies, this process didn’t cost anything.
So, in short: the stimulus process could’ve been even yet still dumber.
(More about the Tax Credit from the IRS.)
Earlier this year, JP Morgan Chase surprised customers with a new fee and an increased minimum required monthly payment. For cardholders who carried large balances month to month, Chase began charging a $10 monthly fee and increasing the minimum payment from 2% to 5% of the balance. The change was announced last November for about 300,000 customers and took effect in January. (See our previous coverage and visitor comments.)
Andrew Cuomo, the New York Attorney General received so many complaints about the surprise move, he required the company to refund the income collected from these fees, totaling $4.4 million, back to customers. Even though the order came from the Attorney General’s office, the official statement from Chase cites customers’ concerns as the reasons for the policy reversal.
The idea that credit card companies can change the terms of their agreements with customers at any time and that customers do not have the same power short of canceling the card provides a strong argument for never carrying a balance from one month to the next, charging only what you can pay off with income before the payment is due. Realizing that we don’t live in a perfect world, this isn’t always possible. But watch for notices in the mail from your credit card company which sometimes these notices arrive in unlabeled envelopes. They can contain information pertaining to changes in your agreement which, if you pay attention, you may decide are not worth continuing your relationship with the company.
A reporter from the Washington Post is looking to hear from Consumerism Commentary readers who are coping with wage deceleration or stagnation. If you have had to make changes to your lifestyle due to wages or salaries that haven’t been rising as quickly as expenses, you are a perfect candidate for this article in progress. The reporter would like to talk to you about the effect of your stagnant income on your ability to save or pay for a child’s education, or any other kind of adjustment you are experiencing.
If this description fits your experience, please leave a comment here or send me an email (flexo at Consumerism Commentary dot com), describing your situation. I will put you in touch with the reporter.
Luke Landes founded Consumerism Commentary in 2003 and has been building online communities since 1990. Luke, also known as Flexo, has contributed to PC World Magazine, US News, Forbes, and other publications. 
