Oklahoma’s Home Buyer Savings Account Act (SB 961) goes into effect on January 1st, 2020! This bill will allow first-time home buyers in Oklahoma to open accounts specifically for the purpose of saving for eligible closing costs on the purchase of a home, including a down payment, escrow account, inspection fees and appraisal fees.
Funds deposited in a designated Home Buyer Savings Account will be tax-deductible up to $5,000 per year for individuals and $10,000 per year for joint filers. In addition, earnings on funds in a designated Home Buyer Savings Account will be excluded from taxable income for an aggregate total of principal and earnings up to $50,000.
What the Home Buyer Savings Account Act Means for You
Starting in 2020, SB 961 will give you the opportunity to reduce your income tax liability by contributing to your designated Home Buyer Savings Account and earn interest on balances under $50,000 without affecting your taxable income in Oklahoma.
How to Designate your First-Time Home Buyer Savings Account
First, make sure you open a savings account that will be used solely for your home-buying funds. A high-yield account like our Reverse-Tier Money Max is an excellent choice!
Next, you’ll want to fill out, print, and sign Form 588 – Oklahoma First-Time Homebuyer Savings Account Account Holder and Designated Beneficiary Form. Finally, make sure to submit your completed form the the Oklahoma Tax Commission no later than April 15 of the year immediately following the calendar year in which the account was opened in order for the account to qualify as a first-time homebuyer savings account for that calendar year.
Next – Start Saving
If you haven’t already, set a budget and stick to it! Include a monthly or bi-weekly savings goal specifically for your nest egg. Remember, contributions to the account – up to $5,000 per year for individuals and $10,000 per year for joint filers – will be tax-deductible.