How to File for Your First Time Home Buyer & Repeat Buyer Tax Credit

how to file first time home buyer credit

Loreena Yeo Real Estate Broker/Owner Frisco, TX (214) 783-2210 Contact Profile

Here are some instructions on how to file for your Frisco TX First Time Home Buyer Tax Credit. It not only apply to Frisco TX homes, but for taxpayers that qualify.

1. You must use Form 1040 to claim your credit on Line 67 of the 2009 return .

You must use the paper version, not electronic version of your return. You can use an electronic software to prepare the returns but not e-file them via IRS. The IRS does not have a website that allows you to upload your supporting documents.

You must use the Form 1040, not Form 1040-EZ or 1040-A.

2. You must include Form 5405 - First Time Homebuyer Credit and Repayment of Credit. Include your filed 2009 Tax Return.

3. You must include your Settlement Statement (HUD-1) to proof your Frisco TX home purchase applicable between the correct dates.

The HUD-1 Settlement statement must include signatures of all parties (buyers and sellers), property address, purchase price and settlement date.

4. If you filed for your 2009 Tax Return, you can amend it via Form 1040-X

. Under Item (C), you want to explain that you purchase your home under the First Time Homebuyer Credit and Repayment of Credit.

While you file Form 1040-X, you want to seek the advice of a tax professional to include other tax deductible items on the Settlement Statement.

5. For repeat buyers who qualify for $6,500 tax credit. you must lived in the same principle residence for at least 5-consecutive years during the 8-year period ending the purchase date of the new home.

You do not need to sell your "old" home to qualify. You must purchase after November 6th 2009 to receive this credit.

Some supporting documents which will help with proving your 5-year consecutive homeownership, include:

- Past 5 years of your Form 1098 (Mortgage Interest statements)

- Property tax records if it showed your homeownership during the 5-year period

- Homeowner's insurance records

You do not need to show proof of all these documents but a combination of these records.

The IRS expects to process these First Time Homebuyer Tax Credit and Repayment of Credit in approximately 6-8 weeks. An amended return will take approximately 12-16 weeks for processing.

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Source: activerain.trulia.com

Category: Credit

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