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How The Federal Tax Credit Saves You MoneyGreat time of year for a homebuyers’ stimulus package! With spring coming (real estate hot season), and financial incentives to boot, this should be a pretty good season for the real estate industry. Homeowners who have cowered in fear over the current Recession can rest a little easier knowing that the end is in sight. While incentive plans only slow, rather than stop steep housing value declines and marginally improve consumer spending, they definitely prove that our governments have decided to do something about the mess we’re in.Unfamiliar with what a “Stimulus Package” can do for you?Well, first of all, it means the things you want will cost less. With tax incentives, like Obama’s $8,000 Home Buyers Tax Credit, and Stephen Harper’s Home Renovation Tax Credit put the money back in your pocket when making big purchases for your home. By spending the money on buying or renovating your home, you’re essentially paying for it with pre-tax dollars.If you’ve ever visited a good accountant, she’ll tell you that spending pre-tax dollars is even better than sliced bread! Pre-tax means that you spend the money that is normally taken by the government in your payroll deductions. It means that at the end of the year, your tax refund check will be much larger than usual if you choose to spend your hard earned money on home improvements (in Canada) or home purchases (in the U.S.).What are other benefits?Since you’re actually living in these hard times, it’s likely that you know someone who has been laid off recently. Not only does it harm their family, but layoffs as a whole negatively affect the standard of living for all citizens. By making large purchases, like buying a home, we create more jobs and more opportunities in the industries that have crumbled as a result of economic hardships.The real estate and auto industries are what provide the backbone of our economy. With real estate values slumping and auto sales nearly disappearing, much of the cash generated from these industries no longer filters back into the public, thereby increasing the cost of living, and reducing the need for employees. By purchasing or renovating a home, you put the cash back into places that keep our economy going. So by remodeling your bathroom, you’re actually doing your part to move our economy out of this Recession.The Bottom LineWhether you read the news or not, you’ve noticed something’s not quite right lately. The doom and gloom is in the air and frankly we’re getting sick of it. Using tax incentives to encourage big purchases is our governments’ version of a life line. We only benefit from taking these incentives and profiting from the value they provide.Ask yourself this, “Is your money really better off in the tax man’s hands?” Or could you see yourself finally improving the upstairs bathroom courtesy of the federal government?