The credit only becomes available once the closing has occurred; the closing date is considered the official date of purchase. Potential homebuyers should remember that the day an offer is made or negotiations begin is not considered the official date of purchase.
The credit may be claimed on either a 2008 or a 2009 tax return. If a homebuyer has already filed his or her 2008 return, he or she may file an amended return reflecting the application of the credit as long as the closing date occurs prior to filing the amended return. The IRS Form for the credit is Form 5405, which the taxpayer should attach to the return or amended return before entering the amount of the credit on line 69 of the Form 1040.
More on Amended Returns
The IRS Form for amended returns is Form 1040X, provided the original return was filed on a Form 1040, 1040A, or 1040EZ. Returns filed electronically may also be amended using the Form 1040X. Be sure to enter the year of the return you are amending; for example, if you qualified for the tax credit and purchased a home prior to April 15, 2009, but did not include the tax credit on your 2008 return, you would enter the year 2008 on your amended return.
If the taxpayer has already received a refund, he should wait until he receives the original refund check to apply for an additional refund. The original refund check may still be cashed once it is received, but this will help prevent any accidental overpayment, which the taxpayer would then have to repay.
On the other hand, if the taxpayer owed additional taxes for 2008, the best strategy is to file the Form 1040X and to pay the tax owed as soon as possible. Prompt payment will limit the amount charged to the taxpayer in penalties or interest. If the first-time home buyer tax credit will be reflected on the amended return, the taxpayer's quick payment of any tax owed will result in a higher refund when the tax credit is applied.
Again, the Form 5405 will need to be attached to the amended return in order to establish that the taxpayer qualifies for the credit.
For Further Questions feel free to contact us. For All Tax Related Decisions we advise strongly that you consult you CPA prior to making a decision. Check Out the latest Douglas county happenings and for further information about Metro Atlanta. If you have a Real Estate need in Atlanta trust the Full time Local professionals at Team Renton Keller Williams. For Free Home Search for Douglasville or Metro Atlanta go to www.servingdouglasvillehomes.com.
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