Jeff, another great job of sharing the information. Buyers do not want to wait till the last minute to write a contract, because it may take time to get all the necessary signatures and signoffs.
The first time homebuyers tax credit - Important Tax Filing Information
Whether you would be applying for the $8,000 tax credit or the $6,500 tax credit, you need to be aware of a few important pieces of information regarding the tax credit that was extended last year.
Important Dates : You have to be in a binding agreement of sale by April 30th, 2010. And keep in mind, it has to be signed by all parties involved and date stamp. This even means if the property is a bank owned property, that the bank has to have signed off on it also.
The purchase has to be completed/closed by June 30th, 2010.
CPA Shares Little-Known Facts About the 2009 Home Buyer Tax Credit Extension - By Doug Geissler, CPA
Doug Geissler has stated that the Internal Revenue Service is literally writing the "refund rules" as they go along. One of the main reasons for this is because of the fraud that has taken place from the previous years tax refunds. Many people were claiming the tax credit who never eevn bought a home or who had filed the tax credit under someone elses name. So overall, what you could do last year, might have changed for this years tax returns when filing for your tax credit refund.
So, what things should you be aware of?
- You can't file an EZ form or even file your tax return electronically. - Why not? The government never had anything in place to determine if you did buy a home or not. There wasn't even any auditing software in place for the IRS to check any of this.
- The IRS now requiring the HUD-1 or closing statement to be attached to form 5405. So that means this form can't be attached electronically, hence why the tax credit can't be filed electronically now. Here is the form and the instructions, Form 5405.
- The refund time frame has been listed now as 16 weeks for a turn-around time. Mr. Geissler has stated that just previously, a client of his was asked for additional information such as a letter from the landlord and the driver's license from the person claiming the tax credit. The news laws to say that the IRS can request extra documentation.
Overall, buyers need to be aware of these changes, that there could be delays if expecting a normal refund also, and speak to a qualified tax accountant or CPA. Here are 2 links to the buyers tax credit :
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Important Information about the First Time Homebuyers Tax Credit
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