Daycare Tax Tips

First-Time Homebuyer Credit

To qualify your purchase must close by Nov 30, 2009

The First-Time Homebuyer Credit is still available for homes purchased through November 30, 2009. This year's credit is a true credit. (The 2008 credit was really loan paid back over 15 years.) It's also "refundable," which means the credit is treated like a tax payment. Therefore, even if you have no tax liability, you will get a refund equal to the amount of the credit (up to $8,000).

If you purchase a home in 2009, the credit equals the lesser of 10 percent of the purchase price of the home or $8,000 ($4,000 if married filing separately). However, if your income is too high, you may lose some or all of the credit because it is phased-out when your modified adjusted gross income is between $75,000 and $95,000 ($150,000 and $170,000 if married filing jointly).

If you purchased a home in 2009, you can wait to claim this credit on your 2009 tax return and get a refund in 2010. Or, you can choose to claim this credit on your 2008 tax return and get a refund sooner. If you already filed your 2008 return, you can file an amended return using Form 1040-X. Whether filing an original or amended tax return, be sure to attach a copy of your final settlement statement (the HUD-1 form). This will help to avoid refund delays. The IRS has already identified numerous fraudulent refund claims.

There is one catch. If you purchased the home in 2009, you must use the home as your principal residence for at least 36 months from the date of purchase. If you don’t, you must repay the full amount of the credit on the return for the year you stop using the home as your principal residence.

Posted on 2009-06-30 06:02:18