While the Internal Revenue Service is encouraging taxpayers to file their returns electronically, taxpayers who used the first-time homebuyer tax credit will have to send in their tax return by paper this year.
First-time home buyers who used the credit will have to go to the IRS Web site, www.irs.gov, to download a form claiming the tax credit. Taxpayers can still use tax filing programs to prepare their return, but will have to print it out and mail it in.
The IRS said paper filing will help prevent fraud and catch people who may have taken advantage of the $8,000 tax credit but didn't use it to buy a home.
The IRS said it plans to start processing returns by mid-February, adding it may take an extra two to three weeks for taxpayers who used the home buyer tax credit to see refunds.
Among other documentation required for taxpayers who used the home buyer tax credit:
• A copy of the settlement statement showing all parties' names and signatures, property address, sales price, and date of purchase.
• For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
• For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner's name, property address and date of the certificate.
In November, Congress extended the federal home buyer tax credit program to June 30 for buyers to settle on a property.
Homeowners who have lived in their home for five of the last eight years can also qualify for a $6,500 tax credit if they close on a home.
We found this article HERE
Showing posts with label Tax Credit. Show all posts
Showing posts with label Tax Credit. Show all posts
Thursday, January 21, 2010
Thursday, December 3, 2009
More Home-Buyer Tax Credit Q&A
By Sandra Block, USA TODAY
If you're in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn't your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time home buyers, scheduled to expire Nov. 30, until next spring.
CHART: Original tax credit vs. newer expanded version
HOME PRICES: Index shows gains; see 20 metro areas
Judging from the mail we've received, a lot of people are interested in taking advantage of this tax break. But the expanded credit also has whipped up a lot of confusion. Here are some answers to questions from readers:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for home buyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time home buyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn't require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there's no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can't claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn't slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 — and that refers to the purchase price, not the assessed value or the amount of your mortgage — you are ineligible for the credit, period.
The $800,000 cap also applies to first-time home buyers, but only those who purchase a home after Nov. 6. First-time home buyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I'm an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn't habitable by June 30, you won't be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time home buyer's credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time home buyer credit, available for homes purchased after Dec. 31, 2008, doesn't have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don't have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time home buyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between "related parties," Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Go HERE to see the article
If you're in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn't your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time home buyers, scheduled to expire Nov. 30, until next spring.
CHART: Original tax credit vs. newer expanded version
HOME PRICES: Index shows gains; see 20 metro areas
Judging from the mail we've received, a lot of people are interested in taking advantage of this tax break. But the expanded credit also has whipped up a lot of confusion. Here are some answers to questions from readers:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for home buyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time home buyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn't require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there's no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can't claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn't slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 — and that refers to the purchase price, not the assessed value or the amount of your mortgage — you are ineligible for the credit, period.
The $800,000 cap also applies to first-time home buyers, but only those who purchase a home after Nov. 6. First-time home buyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I'm an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn't habitable by June 30, you won't be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time home buyer's credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time home buyer credit, available for homes purchased after Dec. 31, 2008, doesn't have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don't have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time home buyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between "related parties," Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Go HERE to see the article
Wednesday, December 2, 2009
New Tax Filing Rules For Home-Buyer Credit Claims
"If you're planning to claim a home-buyer tax credit on your 2009 tax return, you'd better sharpen your pencil. The IRS says you must file a paper return, and cannot file electronically.
In an attempt to crack down on some of the fraud involving first-time home-buyer tax credit claims filed so far, the new law that extended the credit until next spring imposed a couple of new limits. For example, dependents cannot claim the credit. Anyone younger than 18 on the date of the home purchase cannot claim it unless they make the purchase with an older co-buyer.
Members of the military -- and federal employees working for the Foreign Service and intelligence agencies -- on duty outside the United States have been given an extra year to buy a home with the tax credit. They can qualify if they go under contract by April 30, 2011, and close the deal by June 30, 2011. Others, however, must wrap their deals up in 2010.
For more explanations, including some what-if scenarios, check out the IRS Web site."
By Elizabeth Razzi of The Washington Post
To see the article go HERE
In an attempt to crack down on some of the fraud involving first-time home-buyer tax credit claims filed so far, the new law that extended the credit until next spring imposed a couple of new limits. For example, dependents cannot claim the credit. Anyone younger than 18 on the date of the home purchase cannot claim it unless they make the purchase with an older co-buyer.
Members of the military -- and federal employees working for the Foreign Service and intelligence agencies -- on duty outside the United States have been given an extra year to buy a home with the tax credit. They can qualify if they go under contract by April 30, 2011, and close the deal by June 30, 2011. Others, however, must wrap their deals up in 2010.
For more explanations, including some what-if scenarios, check out the IRS Web site."
By Elizabeth Razzi of The Washington Post
To see the article go HERE
Monday, November 23, 2009
Tax credit spurs U.S. home sales
The National Association of Realtors said sales surged a record of 10.1% in October, the highest since February 2007.
Read more about this HERE in an article by the Financial Post.
Read more about this HERE in an article by the Financial Post.
Wednesday, November 11, 2009
Who Plans To Buy Next?
5 percent of Americans (that would be roughly 153,935,250 people) plan to buy a home next year. Read a Fox News article about it HERE.
Home Buyer Tax Credit Q&A
Saturday, November 7, 2009
Friday, November 6, 2009
Home Buyer Federal Tax Credit (Update)
Highlights:
National Association of Home Builders' (NAHB) consumer-oriented Web site, www.federalhousingtaxcredit.com, is being updated right now, and will provide complete details on the enhanced home buyer tax credit after the bill is signed into law by the President. We expect to have it updated by tomorrow afternoon or at the latest, Monday morning.
NAHB will launch a set of resources to help you understand and promote the new tax credit over the next couple of days as well. Check www.nahb.org/taxcreditresources early next week.2009-2010 Home Buyer Federal Tax Credit Fact Sheet, click here.
The information for this post was taken from this page.
- The unemployment extension bill that is expected to be signed into law shortly by President Obama has major benefits for both new and existing home buyers.
- It extends the $8,000 tax credit until April 30, 2010, for first-time home buyers.
- Further, a new $6,500 tax credit has been created for repeat buyers who are purchasing a principal residence during the same period.
- Repeat buyers can claim the $6,500 tax credit if they have been residing in their principal residence for five consecutive years out of the last eight.
- Both categories of home buyers have until June 30, 2010, to close on the home after signing a contract prior to May 1, 2010.
- In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised to $125,000 for individuals and $225,000 for couples.
- Single taxpayers earning between $125,000 and $145,000 can claim a partial credit of less than $8,000 for a first-time home buyer and $6,500 for an existing buyer, while the phase-out for married couples ends for those earning above $245,000.
- Buyers can claim the tax credit on their 2009 or 2010 income tax return.
- The tax credit does not have to be repaid. However, home buyers must use the residence for at least three years or face recapture of the credit amount.
- Since tax credit is fully refundable, it means that the home buyer can claim the credit even if they owe little or no federal income taxes. In other words the government would write you a check.
- For example, if a home buyer owes the government $3,000 in federal taxes and qualifies for the $8,000 home buyer tax credit, the taxpayer would receive a $5,000 refund check from the IRS ($8,000 minus the $3,000 owed).
- Homes over a purchase price of $800,000 do not qualify.
- Like all good things in life, the tax credit won’t last forever.
- Even as the bill neared passage, proponents of the home buyer tax credit made it explicitly clear that the extension would have a limited shelf life and not be extended again when it expires next year. Sen. Johnny Isakson (R-Ga.), a long-time champion of the home buyer tax credit, said, "This is the last extension of the home buyer tax credit. Tax credits like this only work by creating the sense of urgency to take advantage of it, and to bring the market back."
- On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said: “It is important that this tax credit does not become a permanent fixture in the tax code.” Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible."
- Current market conditions are excellent. With the home buyer tax credit now available to a much broader group of consumers, it adds up to an unprecedented opportunity for home buyers.
- Mortgage interest rates are near 5 percent – the lowest level in decades.
- There is a great selection of homes to choose from.
- Home values in many markets are at the lowest level since 2003.
- Many builders have inventory that is “move-in ready,” and they may offer upgrades or other incentives to seal the deal.
- Likewise, owners of existing homes who are looking to trade-up or relocate are ready to bargain.
- Add it all up and there may never be another buyer’s market as good as today’s.
National Association of Home Builders' (NAHB) consumer-oriented Web site, www.federalhousingtaxcredit.com, is being updated right now, and will provide complete details on the enhanced home buyer tax credit after the bill is signed into law by the President. We expect to have it updated by tomorrow afternoon or at the latest, Monday morning.
NAHB will launch a set of resources to help you understand and promote the new tax credit over the next couple of days as well. Check www.nahb.org/taxcreditresources early next week.2009-2010 Home Buyer Federal Tax Credit Fact Sheet, click here.
The information for this post was taken from this page.
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