The recently approved economic stimulus package includes a $8,000 maximum tax credit for first-time homebuyers in 2009.  Below are the top 7 frequently asked questions (FAQ’s) about the tax credit.

1. Who is eligible for the Home Buyer tax credit?

First time home (new or used) buyers are eligible for the tax credit. You must purchase a home on or after 1/1/2009 and before 12/1/2009.  Remember the purchase date is the date when you close and the title of the property transfers to you as the home owner.

2. What is the defined as a first-time home buyer?

Per U.S. laws, a first-time home buyer is a buyer who has not owned a residence during the three-year period prior to the purchase. For married taxpayers, the couple’s homeownership history has to be tested to determine if they qualify for first-time home buyer status.  If one party of a married couple has owned a home within the three-year period, then the couple will not be eligible for the tax credit.

3. How is the tax credit amount calculated?

The tax credit is 10% of a house purchase price up to $8,000 maximum.

4. What are the income requirements for claiming the tax credit?

Single tax payers with a modified adjusted gross income (MAGI) of more than $75,000 and married couples with a MAGI of more than $150,000 will see a reduction in the tax credit. For single tax payers with MAGI of more than $95,000 and married tax payers over $170,000 the tax credit is zero.

5. How do I claim the first time home tax credit?

You will claim the tax credit on your federal income tax return.  You well need to complete IRS Form 5405 to determine the tax credit and then claim it on Line 69 of your 1040 income tax return.  It’s a pretty easy!

6. What types of homes will qualify for the tax credit?

Any home that will be used as your primary residence will qualify, which includes single-family detached homes, townhouses, condominiums, manufactured or mobile homes and houseboats.

7. What does it mean by the credit being refundable?

If the tax payer has little or no federal income tax liability that can be reduced by the credit, the IRS will send you a check for the credit.

Owners of Chase Business Credit Card can qualify for a $200 bonus for opening a Chase Business Checking account. For those of you who don’t have the Chase Business Credit Card, you can get a $100 bonus. Chase will deposit $200 or $100 into your new Chase Business Checking account within 10 business days of confirming the $500 deposit requirement.

A $500 minimum deposit is required and you can choose from four different plans based on the size of your business and the services you require. The least expensive option allows up to 200 transactions per month and provides several ways to have the monthly maintenance fees waived, such as linking your new checking account to your credit card account. The offer ends March 28, 2009.

Visit the following links ($200 bonus or $100 bonus) to print the coupon and bring it to your local Chase Bank or call 1-800-CHASE24 (1-800-242-7324).

I never pay with cash unless I have to.  My wife and I use credit cards for practically everything we purchase.  Many of our monthly bills are paid by credit card.  The reason we do this?  To make money!  We don’t pay credit card companies (late fees / finance fees); credit card companies pay us (cash back).

For years I used Discover Card (note: currently offering a $50 cash back bonus to sign up), which paid 1% cash back, and would earn me about $300 per year.  Not a lot of money but hey – it pays a few bills.

When my wife and I were dating long distance I switched to an AirTran Visa card and was able to earn a few free tickets which amounted to about 1% cash back.  Then we got married and stopped flying as much.  I then switched to CapitalOne No Hassle Visa, which offers 2 miles for every dollar of monthly spending above $1,000, and 1 mile per dollar spent on all other purchases.  The cool thing about this card is you can take the rewards as cash, gift card, buy products, or book airline tickets.  I’ve always taken the cash.

Several months ago, I signed up for the Amex Plum Card because they offered 2% cash back if you spend over $5,000 for the month, and 1% cash back if you spend less.   The trick is you have to pay your balance in full within 10 days of the statement closing date to get the discount.  The nice thing is the cash back is credited to your account automatically.  No need to redeem anything.

Unfortunately, the Amex Plum Card has changed the terms for new customers.  New customers get a 1.5% discount on eligible purchases made that month.  Existing customers are “grandfathered” in under the old terms.  The first year annual fee is waived, after it’s a $185 per year.

Another cool thing about the Amex Plum Card is this; if you run into cash flow problems and can’t pay the bill on time, they will allow you to pay at least 10% of the balance and defer payment of the remaining balance without penalty until the closing date of your next bill cycle.  I never plan on using this because I want the cash back, so I pay on time.

If you want 2% cash back no matter how much you spend each month, there’s good news.  The Schwab Bank Invest First Visa Signature and the Fidelity Rewards American Express credit cards give you unlimited 2% cash back on purchases, automatically deposited into a brokerage account each month.  There’s no limit on the cash back you can earn, no minimum monthly purchase amount, and there are no annual fees.  That’s a great deal and I’m considering signing up!

WARNING! In order for you to make money using credit cards, you must pay off the entire bill and never be late.  If you don’t pay off the bill in full, or if you are late paying, you will incur finance and late fees.  The idea here is to not pay the credit card company any money; you want them to pay you!  So if you are an impulsive shopper with a credit card and you can’t control yourself, pay cash.

Below is what my wife and I earned last year by using our cash back credit cards for personal and business expenses (Amex Plum Card and CapitalOne):

Cash Back Earning in 2008

CapitalOne = $425
Amex Plum Card = $1,111
Late Fees = $0
Finance Fees = $0
Total = $1,536

Note: Check out our list of Best Credit Card Deals

Check out this really great deal from Discover Card you can sign-up for. You get a cool $50 Cashback Bonus when you make $500 in purchases within 3 months after your account is opened.

This offer is only for new accounts. The card comes with no annual fees and $0 fraud liability protection.

But not only do you get the $50, you also get a the following:

• 5% Cashback Bonus in categories like travel, home improvement stores, department stores, gas, groceries, and restaurants
• 5% to 20% Cashback Bonus at top online retailers through our exclusive online shopping site, ShopDiscover
• Up to 1% unlimited Cashback Bonus on all other purchases automatically
• Unlimited cash rewards that never expire Increase, even double, your rewards every time you redeem for gift cards or instant eCertificates from over 100 brand-name Partners

Keep in mind, you should use credit cards to make you money and not cost you money.  The goal is to use credit cards for the cash back which requires that you pay off the balance every month.  To sign-up visit DiscoverCard.com.

If you are the type of person who pays off your credit card bill at the end of the month then you should consider using a credit card with rewards or cashback. Credit card rewards or cashback is a great way to get credit for spending your own money. Click HERE to see the top reward/cashback credit cards.

It’s important that high school and college students learn to handle money and start building their credit. A great way to build credit is the use credit cards. If you handle your credit card wisely, then your credit score will be high and creditors will lend you money at lower interest rates. Below are credit card offers for high school and college students. Be sure to compare the offers and apply online.

Discover Student Card helps students to build their credit history. The card has a no annual fee with a 0% interest on purchases for 6 months with no minimum income or cosigner required. The card also has unlimited cash rewards, with up to 20% Cashback Bonus when you shop online and double rewards with more than 100 Cashback Bonus Partners.

Discover Student Open Road Card is for students who want to hit the open road and save money on gas and auto maintenance by offering a full 5% Cashback Bonus and 1% Cashback Bonus on all other purchases. The card also offers 0% interest on purchases for 6 months and allows students to build their credit history. The card comes with complete fraud protection with a $0 fraud liability guarantee and features advanced fraud early warning alerts, secure online account numbers and fraud specialists 24/7.

New Millennium Bank Secured Platinum is a platinum card that can be yours for the taking. New Millennium Bank can approve you for up to $10,000 in secured credit regardless of your income or credit history. Choose a Visa or MasterCard. You can build your credit with this card because it reports to all 3 Bureaus and there is no credit check. You will be approved regardless of credit history.

Eufora Elite allows you to build your credit by reporting to the credit bureaus. 100% guaranteed approval with no credit check. So don’t worry if you have bad credit. This is a prepaid card, however, there is free direct deposit, free point of sale transactions, free 24/7 online access to your account, and live customer support. The card also offers a cash reward program. The card can be reloaded at thousands of retail locations across the country with a $5000 maximum value.