Homebuyer Tax Credits, Get Em While They’re Hot!

GOOD news for those first time homebuyers (who purchased homes that closed after Nov 30th) taking advantage of the extended first-time homebuyer tax credit or the new “move up” tax credit: You can now actually file for the credit. Don’t want to seem overly negative here, but if they were going to extend it, why not allow the original form to be used for at least the first time homebuyers…oh wait, we are talking Government here….I forgot.

The IRS has released its NEW Form 5405, which is what is now used to claim the credit. It took two months, however, for the agency to get the new form to the public, which left those who closed AFTER the deadline was extended unable to claim the credit, bringing out the lynch mob in all of us.

Anyway, the new form can be downloaded at the IRS Website.

Reports say, however, to expect delays if you are filing for a home buyer tax credit, (kinda like those stimulous checks). According to a CNNMoney.com report, it could be up to four months before you receive your credit.

Now, for those of you who are not familiar with the new “move up” tax credit, this tax credit of up to $6500 is applicable to anyone purchasing another home who has lived in their current home 5 out of the last 8 years.

Also keep in mind that as you get ready to file your 2009 federal return, if you are claiming the home buyer credit, you will have to file a paper return. The IRS e-file system cannot be used if you are claiming a home buyer tax credit.

One last note, you must have your home under contract, not necessarily closed, by April 30, 2010, and you must close the contract no later than June 30,2010. So for example, if you are thinking new construction and you have a contract by April 30,2010, you must have the home completed and closed and the keys in your hot little hand by June 30th…which might be cutting it a bit close. So keep a close eye on deadlines in your contracts….or better yet, have your buyer’s agent do the same!