Wednesday, February 10, 2010

$ 8,000 Tax Credit Is Still Going Strong!

Well kids, you still have time to get one of the greatest gift from Uncle Sam! A new Senate proposal will offer a first time home buyer an $8,000.00 tax credit. This program has been widely popular, and this is probably the final extension. You can take advantage of this up to April, as long as you are under contract by April 30, 2010. The former deadline was November 30, 2009 – but the program has proven so popular that the government has kept things around for a few more months…. Single taxpayers with incomes of up to $125,000 and married couples with incomes up to $225,000 are eligible to receive the full tax credit.

Current Charlotte Homeowners looking for a replacement primary residence can also qualify for a $6,500 (up to $3,250 for a married individual filing separately) under the new “long-time resident” provision. They must have lived in the same principal residence for a five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased. (Shew!) This new provision also only applies to homes purchased after Nov. 6th 2009.

The IRS has stepped up compliance checks involving the home buyer credit for those with past homes and they must provide a mortgage Interest Statement, Property tax records or Homeowner’s insurance records, to prove compliance with past residency criteria.

To get into the fine print – if you plan on claiming the new home buyer credi… For qualifying purchases, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. A new version of Form 5405, First-Time Home buyer Credit, is now available on the IRS website. Taxpayers claiming the credit on their 2009 returns, will not be able to file electronically because of the added documentation requirements, but instead will need to file a paper return by using the new version of Form 5405. A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.

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