In the midst of a struggling economy and high unemployment rates, those who have positioned themselves to survive this economic crunch can take full advantage of the programs implemented in efforts to stimulate a lagging economy. The mortgage and housing industry is expecting to benefit greatly from the Homebuyer Tax Credit offered through April 30 of this year.

 
So what was the big hoopla? A healthy tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. Even qualified repeat home buyers can receive a tax credit of up to $6,500. So I’m sure you next question is… “what do I need to qualify?” Here are a few tips and key points you should be aware of. You have only a short time to make this happen, so carefully review these points and contact your real estate professional immediately! You will reap the rewards and your tax professional can maximize this and other deductions and credits you will qualify for as a homeowner.
 
So here’s what you need to know:
 
·   A tax credit of up to $8,000 is available for first-time home buyers purchasing on or after January 1, 2009 and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. The key here is April 30 to lock in the contract, and June 30 to close. Don’t forget these dates!!!
 
·   A tax credit of up to $6,500 is available for repeat home buyers who have owned a home for five consecutive years out of the prior eight years. The repeat home buyer tax credit applies to houses sold after November 6, 2009 and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
 
·   Income limits of $125,000 for individuals and $225,000 for married couples filing jointly apply to all sales occurring after Nov. 6, 2009. The income limits for sales occurring on or after January 1, 2009 and on or before November 6, 2009 are $75,000 for individual taxpayers and $150,000 for married couples filing jointly. Given the current state of the economy, this should fit most Americans. If you’re making more than that, you probably don’t need the credit as much as others.
 
·   Homes priced above $800,000 are not eligible for either the first-time home buyer tax credit or the repeat home buyer tax credit. I think most of us can live with a $750,000 home if necessary to qualify for the credit!
 
·   Expanded tax credit benefits apply to members of the military, the foreign service and the intelligence community.
 
·   Home purchases in 2010 may be claimed on an amended 2009 income tax return. This is important! Contact your tax professional with your intentions to make a purchase this year to see the impact THIS YEAR!
 
·   Persons who are claimed as dependents by a taxpayer or who are under age 18 do not qualify for a tax credit.
 
·   Home purchases from relatives of the taxpayer or the taxpayer’s spouse do not qualify for the tax credit. The IRS defines relatives as ancestors (parent, grandparent, etc.), lineal descendants (child, grandchildren, etc.) and spouses.
 
·   Married couples are not eligible to claim the first-time home buyer tax credit if either spouse has previously owned a home. They may, however, qualify for the repeat home buyer tax credit.

·   Neither the first-time home buyer tax credit nor the repeat home buyer tax credit have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

·   Taxpayers must submit a copy of the HUD-1 settlement statement and IRS Form 5405 to claim either the first-time home buyer tax credit or the repeat home buyer tax credit.
 
So you’re ready to rock and roll! You can now apply for your first time homebuyer tax credit with the new and improved form 5405. With the new form 5405, the IRS is asking you to attach proof that you actually bought the house to help deter fraudulent claims.  Examples of what they consider proof:

A copy of the settlement statement, preferably form HUD-1
A copy of the executed retail sales contract for mobile home purchases
For a newly constructed home, a copy of the certificate of occupancy

If you find you need additional help, please consult a licensed tax professional regarding the best decision for your specific situation.