February 23rd, 2010

Homebuyer Tax Credit 2010 Filing Rules for First Time Homebuyers and Existing Homeowners.  The popular tax credit program helps those purchase a new home. With the FED raising the prime rate a whopping quarter percent, those in the market for a new house may need to act fast before mortgage rates start to rise.

The IRS will allow $8,000 to someone who purchased a primary residence after not owning their own home for 3 of the last 5 tax years.

To qualify for the credits, here are the requirements:

- You must have used the home you are vacating as your primary residence for 5 of the 8 previous tax years.
- If you are married, both must meet the IRS definition of “first time homebuyer” to get the $8,000 credit
- Homes up to $800,000 are eligible for the credit

- Taxpayers can earn up to $125,000 per year if individuals or $225,000 per year if married and get the full tax credit.  The credit is phased out up to $145,000 for individuals and $245,000 for married couples.

To obtain the credit, submit IRS form 5405 along with a copy of your settlement statement. When the IRS processes your tax return, you will receive either a reduction in the taxes you owe or you will receive your refund.

It’s that simple.  Of course, filing governmental paperwork is nerve wracking at times.  If you are worried you might mess something up or just don’t feel comfortable filling out the paperwork, contact a qualified tax return preparer in your area.

Source:

IRS.gov