You may have heard – under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before December 1 can receive up to $8,000 (or $4,000 for married taxpayers filing separately). The credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers. Taxpayers are able to claim 10 percent of the purchase price of the home, up to $8,000 or $4,000 for married filing separately.
There have been many questions floating around about how to take the credit and whether it can be taken in 2008 or 2009. The simple answer is that it can be taken in either year, depending on how you claim it and what may benefit you the most.
According to the IRS, there are four possible filing options to consider:
File an extension – If you haven’t filed your 2008 taxes yet and know you are going to be buying a home before October 15, you can request a six month extension. This would be faster than waiting to file on the 2009 return. Even if you file an extension, you can file electronically and get your refund in as few as ten days.
File now, amend later – If you are due a nice sized refund for 2008 and you are considering buying a house in the next few months, you can go ahead and file April 15 and amend your return to claim the credit later this year.
Amend the 2008 tax return – If you are buying a house in the near future but have already filed your 2008 return, you can file an amended tax return to claim the credit and you will not have to wait until the 2009 return.
Claim the credit in 2009 rather than 2008 – For some of you, it may be more in your favor to wait and claim the credit in 2009. The credit could be higher for you in 2009 due to a job loss or drop in investment income. If either of these things could affect you in the future, it may benefit you to wait until the 2009 filing season.
For more information on tax credits for the first home buyer check this section on IRS’ website.
