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Happy 2021 and welcome to the income tax season.

For some, it is a happy time because they expect to receive a refund of a portion of the taxes they paid throughout the year. For others this is a time to pay the government the amount of taxes that we owe Uncle Sam.

Let’s pause and take a moment to review what an income tax return really is and what a tax refund consists of.


1. An income tax return is a declaration of personal income earned annually to government or taxing authorities. Returns are filed with either the federal, state government, or both entities.

2. An income tax return is used as a basis for assessing an individual’s liability for unpaid taxes or for receiving a refund of income taxes paid. A refund is a return of excess taxes paid during a given tax year such as 2020.

3. Federal tax returns must be filed every year for an individual or business that received income during the previous year, whether through regular income (wages), interest, dividends, capital gains, tips or other forms of profit.

4. Governments impose an income tax on an individual’s or a business’s financial income.

5. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund.

6. Income tax funds are a key source of revenue that the government uses to fund its activities and serve the public.

Now that we have gotten a few definitions out of the way, let’s look at what you can do with your tax return to help you reach your dream of homeownership.

Income tax season is the perfect time to maximize your savings for buying a home. Instead of buying a car which loses its value over time, consider buying your first home which increases in value over time. You begin building equity when you buy a home. With the equity value in a home, you are building value in an investment. And the tax deductions that become available to you as a homeowner will reduce your income tax bill substantially.

Make tax time home buying time

If you receive a sizable 2020 income tax refund, what would you do with it? A sizable amount might start at $3,000 to $6,000 and increase from there. Stop a moment and think about that question, especially since income tax refunds happen every year but winning the lottery could take years.

When your tax refund does come, it is a good idea to have a plan for what you would like to do with it. This way when the money arrives you can act rationally. Your annual income tax refund is a great opportunity that you don’t want to waste.

There are three to four basic choices on how you use your refund.

1. Spend it

2. Save it

3. Invest it

4. Use it to pay bills

The option you choose depends on your circumstances. We strongly recommend you consider using your tax refund as part of your money saving equation (refund + savings = down payment) towards buying your first home.

Tax season is a good time to strategize for saving to buy a home. Buying your first home is a huge step. Be not afraid. Breaking the home buying process into smaller steps helps to make it easier to reach your goal.

Step 1. Start saving extra income early like your 2019 tax refund, cost of living increase and merit raises.

Step 2. Do not add new bills such as a new car, new furniture and other big-ticket items like appliances.

Step 3. Talk to a HUD-Certified housing counselor about your credit score. They will let you know if you need to take a little bit of your tax return to bring credit accounts current. You may not need to use all of your tax return to pay off credit cards and other bills. Save as much of your tax refund as possible for your down payment.

Step 4. Hang onto your job and keep it steady. Banks look for consistency in employment. They want to know that buyers are not moving from one job to another frequently.

Why not to let Uncle Sam help you start your savings plan. Save your income tax refund and keep saving until you are closer to buying a home of your own in 2021.

Let Your Next Step = Home!

Let the Housing Finance Authority of Miami-Dade County (HFA) help you turn your vision of homeownership into reality. We’ll guide you along the road to homeownership.

Browse our website to learn about more HFA programs. Or speak with someone immediately at 305-594-2518. The Housing Finance Authority’s mortgage is perfect for first-time homebuyers in Miami-Dade County. Our 30-year mortgage has a fixed, low interest rate. Best of all, we offer up to $10,000 in down payment and closing costs in the form of a 0% deferred loan.

The process is simple and easy.

· Complete an 8-hour, HUD-approved homebuyer education course

· Pre-qualify with a participating HFA lender

· Search for a home in your price range

· Consult with a Realtor, search the internet or look through real estate publications to find a home

· Provide a deposit to the seller and obtain a contract

· Take a signed contract to the program lender to begin the closing process

or for more information about becoming a first-time homeowner.


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