Military or not, if you are in the market for your dream home, Congress wants to help you realize your dreams. You may be eligible for a First-Time Homebuyer Credit, extended to cover that new home purchase until April 30, 2010.
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Top 10 Tips for Extended Homebuyer Tax Credit

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Military or not, if you are in the market for your dream home, Congress wants to help you realize your dreams.

Of course, if you are a veteran, you can count on a VA Home Loan for the lowest rate mortgage, and help holding onto your money since no downpayment is required on your VA mortgage. Add to that the fact that you may also be eligible for a First-Time Homebuyer Credit, extended to cover that new home purchase until April 30, 2010, and you have a great opportunity to be a new homeowner.

TOP 10 FOR TAX CREDITS

Here are the top 10 tips for accessing your First-Time Homebuyer Credit, and getting your tax credit where it's due.

  1. To qualify for the First-Time Homebuyer Tax Credit, you must buy - or enter into a binding contract to buy a principal residence - on or before April 30, 2010.

  2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.

  3. For qualifying new home purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.

  4. A long-time resident of the same home can now qualify for a reduced credit! You can qualify for the credit if you've lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.

  5. The maximum credit for long-time residents is $6,500. Married individuals filing separately are limited to $3,250.

  6. People with higher incomes can now qualify for the new homeowner tax credit! The law raised the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.

  7. The IRS will issue a December 2009 revision of Form 5405 to claim this credit. The December 2009 form must be used for homes purchased after November 6, 2009 - whether the credit is claimed for 2008 or for 2009 - and for all home purchases that are claimed on 2009 returns.

  8. No credit is available if the purchase price of the home exceeds $800,000.

  9. The homebuyer must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.

  10. A dependent is not eligible to claim this tax credit.
MORE TAX BENEFITS, MORE TIME TO BENEFIT

Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit.

The first-time homebuyer credit:

  • Applies only to homes used as a taxpayer's principal residence.

  • Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.

  • Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The tax credit is claimed using Form 5405, which you file with your original or amended tax return.For more information about the expanded First-Time Home Buyer Credit, visit IRS.gov/recovery.



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