As a Montana Resident, a special savings account is available for the purchase of your first home. You can save on Montana income taxes due to this First-time Home Buyer Act. The first-time home buyer savings account can be established at a state or federally chartered bank, saving/loan, credit union, trust company, mutual fund company, or with any brokerage firm. The options are very open. Commonly asked questions and answers regarding the accounts and affiliated tax benefits are seen here.
------------------------What are some of the requirements of the new law?
The first-time home buyer savings account must be opened after December 31st, 1997. Unfortunately if you bought your first home prior to January 1st 1998 you do not qualify. Your home must be established prior to the purchase of your home and the money in the account must be used for eligible home buyer expenses.
----------------------------------How much will I save on state income taxes?
Simple answer: up to $3,000 for those filing singly and up to $6,000 for joint filers. It is based on your adjusted gross income and therefore is dependent upon your individual tax bracket.
What is the minimum/maximum time period a first-time home buyer ---------------savings account must be in existence before I can use it?
The first-time home buyer savings account must be established prior to the purchase of a qualifying home, and as long as the account is opened prior to the closing papers being signed, you are qualified for the Montana state income tax reduction.
On the other end of the spectrum, the account must be used 10 years from the date the account was established.
----------Are there any forms that have to be filed with the Department of Revenue when I file my Montana income tax returns?
The account holder must file an annual report found at www.mt.gov/revenue. Account holders must also keep records of any withdrawals from the account used for paying expenses for a first-time purchase of a home.
I always enjoy reading your blog post and I hope you have a magnificent Sunday and a productive day.