Are you planning to claim the home buyer tax credit when you file your taxes? If the answer is yes, here are a few things you need to be aware of as you organize your documents.
Most important and unknown to most people is that you will NOT be able to do a quick efile if you’re claiming the home buyer tax credit. Blame it on all the people who committed fraud last year in claiming the credit. The IRS won’t tolerate it this time around and unfortunately has made it more time-consuming in 2010.
In addition to Form 5405, the following may also be required when your return is submitted to the IRS:
- A copy of your purchase HUD-1 (Settlement Statement) with signatures of both buyer and seller.
- For those claiming the tax credit as a “long time resident” home buyer (meaning you’ve owned and occupied your previous residence for a 5 consecutive year period during the 8 year period ending on the purchase date of your new home), in addition the HUD-1 (Settlement Statement), you will also need to provide at least one of the following: Form 1098 (Mortgage Interest Statement) for the previous property, property tax records, and/or homeowner insurance documents. This information is required to prove the home was owned and occupied for a minimum of five out of eight years.
These instructions will be very important. Failure to provide the paperwork will cause a delay in the processing of any refund. But regardless, be prepared for your refund to take much longer than usual this year. That’s especially the case if you have become accustomed to filing via your computer.
If you are having your taxes done professionally, take the time to find what you need in order to file and take the required paperwork to your appointment. Get advice from your tax professional to make sure you qualify.
For anyone still waiting it out to buy a home in time to get the tax credit, there are only three months left. A contract to purchase must be signed by April 30, 2010. Your loan must close by June 30, 2010.
Mortgages take longer to process and close compared to just 6 months ago. Chalk it up to the many regulatory changes. It will be a risky proposition trying to close a loan on a short timeline.
Give me a call to get qualified as soon as possible.
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{ 3 comments… read them below or add one }
bad news. we haven’t filed taxes yet but we did want to get our refund back quickly. thanks for this info. ur saying the refund must be sent back to us in a irs physical check in the mail ?
@ Polly Mill – That is what the IRS is saying as of now. Check with your tax practitioner for any updates. This is a work in process and the IRS is constantly making changes.
they giveth, then they make us jump through hoops to get it. no one should be surprised.