First-time homebuyers do not necessarily have to go through a real estate agent to receive the tax credit. Homes that are “for sale by owner” also are eligible. First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. First-time buyers can claim a credit worth $8,000. The added bonus is that the credit is refundable, which means that filers will see a refund of the full $8,000 even if their total tax bill was less than that amount.
First-time home buyers purchasing any kind of home new or resale are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009.
Taxpayers who qualify for the first-time homebuyer credit and purchase a home this year (before Dec. This special feature can put money in first time buyers' pockets right now rather than waiting another year to claim the tax credit. Taxpayers are urged to consult a professional to determine the tax consequences of a sale. Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
Taxpayers who file their taxes after receiving an extension can still file electronically, the IRS says. By e-filing and arranging for direct deposit, you can get your refund in as few as 10 days. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
File for the tax credit when preparing your 2009 federal tax documents by using Form 5405. You may also be eligible to claim your 2009 purchase on your 2008 tax filing.
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceed the phase-out limits.
FHA put up a mortgagee letter stating how the program was intended to work, and then took it down the same day. The details that were supposed to come out within the week didn’t come out. FHA has a list of approved lenders that can use the bridge loan type product.
Families can only access this credit after filing their tax returns with the IRS. The announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Families will now be able to apply their anticipated tax credit toward their home purchase right away.
Extend the time frame that the tax credit is in effect to somewhere near the end of 2010 depending on when the bill is passed (if it gets passed). The bill suggests that it be in effect for 1 year from its approval into law.
Owning a home can take a lot of time and expense but for many, its drawbacks are far more complicated than sticks, leaves, and paint. Owning a home can result in many tax advantages such as deducting mortgage interest and real estate taxes if you itemize deductions. The government’s recent attempts to stimulate our economy have included additional tax advantages for some first-time home buyers.
Ownership of non-primary residences such as rental properties or vacation homes does not disqualify a first-time home buyer from the $7500 tax credit. All you have to do is claim the tax credit on your federal income tax return.
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Gurmit loves travelling; he has been over 70 countries. He speaks fluent Cantonese, Polish, Hindi, Punjabi and English. Gurmit is an author, writer, insurance and mortgage expert. He frequently writes on various topics of interest to his readers. Gurmit Singh is a licensed mortgage expert with Dominion Lending Centres Mortgage Villa.
Gurmit Singh, mba
Mortgage Expert
M08009905
Dominion Lending Centres Mortgage Villa (11574)
Email:gurmit@gurmitsingh.ca
Website: http://www.gurmitsingh.ca
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