First Time Homebuyer Tax Credit Extention Information

It’s not too late! You may still be able to take advantage of the Government’s First-Time Homebuyer Credit.

With the passing The Worker, Homeownership and Business Assistance Act of 2009, Congress extended the First-Time Homebuyer Credit and expanded who qualifies.

Before you rush out and start looking for your dream home, read the following things the IRS wants you to know, and the guidelines you must meet in order to qualify for the expanded credit.

-You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.

-If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.

-For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.

-A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.

-The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250.

-People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.

-The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.

-No credit is available if the purchase price of the home exceeds $800,000.

-The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.

-A dependent is not eligible to claim the credit.

Now read about what the IRS is not telling you about filing for the Homebuyer Credit – because it’s always best to make an informed decision…..

Like most government legislation, the Nov 6, 2009 homebuyer tax credit extension created more questions than answers. However, according to Doug Geissler, CPA, the IRS is literally writing the “refund rules” as they go along.

Unbeknown to homebuyers, real estate agents and the mortgage industry, the IRS is giving behind-the-scenes instructions—that are not available to the general public—to CPA’s and tax advisors on how to file for the home buyer tax credit after Nov 6, 2009. It will be completely different …..

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