Things You'll Need
First time home buyer eligibility (See content for explanation)
For more detailed information on meeting eligibility, visit the Link given in Resources section of this article. It is important to make sure that you qualify for the first time home buyer credit before filing the Form 5405. See the Form 5405 for list of detailed eligibility requirements. Some of the important requirements are as follows:
1) The house or condominium must be purchased between December 31, 2008 and December 01, 2009 for first time home buyer $8000 Tax credit and between April 8, 2008 to December 01, 2009 for $7500 credit payable in 15 years.
2) The home must be purchased as a Primary Residence by the buyer. The buyer should not have owned a house at least 3 years before this purchase.
3) The adjusted gross income should be below $75,000 and $150,000 for Single or married couple filing jointly respectively. It should be below $95,000 or $170,000 for phase out limit of the credit.
LOCATING THE FORM 5405
Visit the IRS website from the link given in Resources section of this article. In the search box, type "5405" without quotes. The search results will show various links related to the First time home buyer credit application. Download the PDF file for Form 5405 on your computer. This is the form that you will need for claiming the $8000 tax credit.
FILLING CORRECT INFORMATION
It is very important
to fill out this form correctly in order to avoid delays in processing. Make sure you have all the necessary information for eligibility and then proceed. PART I is the general information section where you should fill in your details such as Address of the purchased home and Date of purchase / closing. Also check the box in C if the home was purchased between December 31, 2008 and December 01, 2009. This is important to claim $8000 non pay back Free money. Others should not check this box and can claim $7500 tax credit payable in 15 years.
In the PART II, enter the smaller amount of either 10% of home purchase price or $8000. For example, if a buyer purchases a condominium for $65,000 on April 20, 2008 then he / she should enter $6500. If the price was $150,000 then he / she should enter $8000.
Also enter the MAGI (Modified Adjusted Gross Income) from your Tax return form 1040. Perform the calculations indicated and enter the Tax Credit amount on Line 6.
FILING THE FORM WITH IRS
The final step is to check the entire form for errors. If everything looks good, Attach the form to your Tax Return form 1040. You can also choose to fill this information through Tax Return filing tools online electronically with your 2009 Tax Return. If you want to receive this credit sooner, then you can file an amendment form 1040x for your 2008 Tax Return and claim the Tax credit.