How to File for $8,000 Tax Credit
The IRS will not accept the 5405 form electronically so it must be done the old-fashioned way, with paper-filing; and could take up to 4 months to get your money.
When filing form 5405, the IRS is also requiring a copy of the settlement statement (HUD-1), a signed mortgage statement with the new address, and a copy of either the taxpayer's driver's license, bank statement, or paystub, showing the new address.
From CNNMoney.com, we have just learned that the way the IRS is "handling" the tax credit is turning into yet another stumbling block to helping the real estate market recover. This seems to me to be so unfair! Anyone who qualified for the credit probably could really use that money, whether to repay mom and dad for the down payment loan or as cash to repair that fixer-upper they bought. I'm going to email the article and link this out to my clients IRS Form 5405.
Home Buyer Tax Credit: No e-file and four month delays
NEW YORK (CNNMoney.com) -- Good news homebuyers: You can file for your $8,000 first-time buyer tax credit again. Bad news: You still can't e-file your taxes if you want the cash. And there are long delays.On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.
The two-month delay was frustrating to Florida resident Charles Teschke. "We are not broke or anything, but nevertheless we were still counting on getting the tax refund to help pay for the appliances and stuff we needed for our new home," he said. "The IRS told me they estimate it will take four months for me to get my refund!"
First-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.
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