The process of home-buying can be a complicated one. You have to find and tour suitable homes, examine your finances and think about taking out a mortgage to be able to pay for your home. The paying aspect is where many people, especially in this financial climate, find themselves getting tripped up. However, the Iowa Finance Authority has instituted a new program to help home buyers reduce their household’s federal tax liability.
It’s called the Take Credit Program. In this program, a percentage of a homeowner’s mortgage interest becomes a tax credit that can be deducted dollar-for-dollar from federal income tax liability. For example:
Interest Paid in First Year: $3,968
Take Credit First Year Tax Credit: $1,984 (50 percent of interest)
There are also eligibility requirements that must be met:
- First-time home owner OR
- Military veteran OR
- Buying a home in a Targeted Area
- Income Limits: 1-2 household: $71,599 in Buchanan County
- Purchase price limit: $250,000 in Buchanan County
Additionally, there are some other noteworthy issues you should be aware of. The maximum tax credit you can receive is $2,000 per year, and unused credit can be carried forward for three years. This credit cannot be used with the IFA’s FirstHome or FirstHome Plus programs, but can be used along with the Homes for Iowans and Homes for Iowans Plus programs.
To apply, all you have to do is come by any of Security State Bank’s branches! Our mortgage experts can help you understand this tax credit and will make sure that you are eligible. Once you are found to be eligible, they can help you fill out the necessary paperwork to receive this annual tax credit.
At Security State Bank, we are ready and willing to see you achieve your dream of owning a home and being able to stay in it. With the Take Credit program from the Iowa Finance Authority and Security State Bank, you can do just that. Come by today!