We are getting toward the end of the year, but if you bought a home this year and qualify for the first time home buyers tax credit, you don’t have to wait until you file your taxes next year to get the credit. There is still time to apply and modify your 2008 taxes and get the credit early. In order to do this you will need a copy of your HUD1 closing statement from your closing (it is a legal sized document with 2 columns of figures showing credits and charges for both the buyer and seller) and two IRS tax forms, the IRS Form 5405 First Time Home Buyer Tax Credit Form and the 2008 Amended tax form. The two IRS documents are easy to fill in one page forms. Have your tax return handy and you can use it to fill out everything. It should only take a few minutes, and this will speed up the process of getting your money back as quickly as possible. If you filed your taxes through an accountant or tax service, they should be able to re-file this as part of their service, but it is easy enough to do it on your own.

With the new extension and expansion of the tax credit, more home buyers will qualify. This extension opens the credit up to current home owners and buyers with higher income than what was allowed before. The home buyers tax credit extension covers homes brought under contract up until April 30^th and they have to be closed by June 30^th. 

Here are the details of the New Home Buyers Tax Credit:

1. The credit is for 10% of the purchase price up to a maximum of $8,000 for first time home buyers and up to $6,500 for qualified move up buyers. This means that if you are a first time home buyer and your purchase is $80,000 or more, the credit will be $8,000.
2. The credit is good for properties that are under contract by April 30^th and you have until the end of June to get the financing together and close.
3. It is now available for first time home buyers (a first time home buyer is anyone who hasn’t owned a home in the last 3 years) and move up buyers who have lived in their home for 5 consecutive years out of the last 8.
4. The home has to be for your primary residence. Second homes and investment properties don’t qualify.
5. This is a true tax credit. As long as you stay in the home at least 3 years, the credit is yours to keep. If you sell before 3 years is up, you may need to pay the credit back.
6. If your tax liability is less than the $8,000 credit ($6,500 for move up buyers), you will get the difference as a check back to you. If you have already filed your taxes, you can file an amended tax return in order to take the tax credit in the current year and get the money back quicker.
7. Income caps apply. They have increased the income caps so more home buyers will now qualify. A single buyer qualifies as long as they earn up to $125,000 per year, and couples are maxed out at $225,000 per year. Higher earning borrowers may get a partial credit, but the amount decreases as their income rises.

If you have any questions or need to be pre-approved for a mortgage, let me know.

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