(MERCER COUNTY AREA, NJ) -Tick TOCK!!! Time's Running Out for First-time Homebuyers AND How to receive the credit before you file your 2009 return...

(MERCER COUNTY AREA, NJ) -Tick TOCK!!! Time's Running Out for First-time Homebuyers AND How to receive the credit before you file your 2009 return...

Looking to to take advantage of the First-time Homebuyers Credit this year? We'll if you haven't found your perfect starter home yet, it's time to get cracking.
The current First-time Homebuyers Credit is for homes purchased on or after Jan. 1, 2009, and before Dec. 1, 2009. (There is a different tax credit for homes bought in 2008.) So, in order to get this credit, you must close on your home by Nov. 30. Factor in that the closing of a home can take on average 30 to 45 days, and this means that the home needs to be under contract by mid-October.

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For eligible first-time homebuyers who purchase a home on or after Jan. 1, 2009 and before Dec. 1, 2009, the first-time homebuyer tax credit is now $8,000 and unlike eligible first-time homebuyers in 2008, the qualified 2009 first-time homebuyer no longer has to repay the credit unless the homeowner sells or moves out of the home within 3 years of purchase. This is BIG!



The tax credit is 10 percent of the purchase price of the home with a maximum credit of $8,000. The $8,000 credit begins to phase out for individuals with MAGI (modified adjusted gross income) over $75,000 and at $150,000 for married couples filing jointly. It is fully phased out for individuals with MAGI of $95,000 and at $170,000 for joint filers, half that amount for married persons filing separate returns.

Qualifications

In addition to income requirements for eligibility of the first-time homebuyer credit, there are some other things you should know to qualify for the credit:

■You (and your spouse, if married) cannot have owned a home in the three years prior to a purchase
■You cannot purchase your new home from a close relative including spouse, parent, grandparent, child or grandchild, though the purchase of a home from a sibling (brother or sister) does not disqualify you from claiming the credit; purchases from step-relatives are allowed for the credit as well
■You must purchase the home beginning Jan. 1, 2009 and before Dec. 1, 2009; for a home under construction, you must occupy the home before Dec. 1, 2009
■The home must be your principal residence; rental property and vacation homes do not qualify for the credit
■You are not eligible for the credit if you are a nonresident alien; for married couples filing jointly, one must be a U.S. citizen to qualify for the credit
■The credit does not apply to homes purchased and located in the U.S. Territories
■If you owned a principal residence outside of the U.S. within the last 3 years, and meet the other requirements, you are eligible to claim the first-time homebuyer credit for a home purchase in the U.S.

Receiving the tax credit before you file your 2009 return

The IRS has a special form for the First-Time Homebuyer Tax Credit, in March of 2009 for those who purchased a home in 2009 and wanted to claim the credit on their 2008 return. If you want to claim the credit early instead of waiting until you file your 2009 return (in 2010), the tax analysts at The Tax Institute at H&R Block recommend filing an amended 2008 return (Form 1040X) so that you can receive the credit as soon as possible.
When in doubt …
As with any financial decision that has tax implications, the best advice is to always talk with your tax professional to determine a course of action that may be best for your individual financial situation.
This Tax Tip Article is brought to you by The Tax Institute at H&R Block.
To view other helpful tax tip information, visit the H&R Block Community, Digits, at www.digits.hrblock.com
As always...everyone's tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.
This Tax Tip Article is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.