Claiming the First Time Home Buyer Tax Credit: Don't Miss Out On the Opportunity to Receive Up to $8,000 from the Federal Government!
If you are currently looking to buy your first home or the first one in three years, you have likely heard of the federal government's first time home buyer credit which can award you with 10% percent (up to $8,000) of the purchase price of your home. If you meet the regulatory definition of a first time home buyer, fall within the specified income limits, and are not otherwise disqualified from receiving the credit you are likely wondering how to go about claiming it. This is what I will describe in this article.
Claiming the credit is a relatively straightforward process but it is important to follow all the steps carefully to avoid making silly mistakes and filing for it in a timely fashion. The first thing you should bear in mind is that you cannot claim the credit for an intended purchase at some future point in time. The credit can only be claimed for completed purchases and you will need to submit a copy of your HUD-1 settlement form as proof of the completed transaction.
You essentially claim the credit on your federal income tax return. You first need to complete IRS Form 5405 to determine the amount of your credit. Next, attach a copy of your HUD-1 settlement form to Form 5405. Then, enter your eligible credit amount on line 67 of the 1040 income tax form for 2009 returns or line 69 for 2008 returns. Lastly, package all your documents, mail it in, and you are done! No other special forms or pre-approval is necessary. If you qualify for a refund, the only thing left to do is to sit back and wait for your check to arrive.
