Thursday, April 23, 2009

FIRST TIME HOME BUYER TAX CREDIT AND YOUR OPTIONS IF YOU BUY AFTER APRIL 15, 2009

The IRS released a notice recently concerning an obvious contradiction:

• The deadline to purchase a home and potentially qualify for the 2009 first time home buyer
tax credit is November 30, 2009.
• You can claim this $8,000 refundable tax credit on your 2008 tax return.
• Your 2008 tax return is due April 15, 2009.

QUESTION 1. : So how can I claim a credit on my 2008 tax return if I haven't purchased a home by April 15?

Here are your options:

1. Extend your tax return. File Fonn 4868 and automatically receive a six-month extension
to file. Note, this is not an extension of time to pay your taxes if you think you'll owe.

2. File now. Amend later. Another option is to file your return on time and then file an
amendment ( Form 1040X) after you close on your home. Up to $8,000 back
in your pockets less what you would have owed already.

3. Claim it in 2009. You don't have to take the first time home buyer credit in 2008. Instead,
you can choose to take it in 2009. For some people, this may actually be better.

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