Buy a home in 2009 before December 1, and the IRS says you can apply that $8,000 first-time home buyer credit to your 2008 taxes. IRS has revised its Form 5405, which you can access on the IRS.gov web site.
Of course, if you want to apply the credit to your 2009 tax return when you file next year, that's permissible as well. But some home buyers might prefer to offset their tax liability for 2008, and this is a good way to do it. It all depends on whether you want the big tax refund in 2009 or 2010.
Qualified home buyers can claim 10% of the purchase price as a tax credit, up to $8,000, and $4,000 for married individuals filing separately, providing they stay in the home for 3 years and meet certain income requirements.
The instructions on Form 5405 provides all the details. Isn't it nice how this tax credit for home buyers keeps getting better and better?
If you're waiting for a reason to buy a home in Sacramento, and plan to file your taxes by April 15th, buying now would mean you wouldn't have to amend your tax return if you want the credit to apply to last year's taxes. Ask your accountant about the tax credit and how it can benefit you.
Remember, more than 75% of the sales in Sacramento right now are foreclosures and short sales. Sacramento home buyers can find a terrific deal in this market.
The Short Sale Savior, by Elizabeth Weintraub, coming June 2009.
Photo: Big Stock Photo
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