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You've decided to purchase a home and take advantage of the 2009/2010 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
- Close on your home purchase by April 30, 2010
- Ensure that you are a qualified first-time buyer under IRS guidelines
- Decide which year to file under, 2009 or 2010
- File an amended 2009 return or choose to apply the credit to your 2010 tax return
WHEN TO APPLY THE CREDIT
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2009 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2009 return, then you can simply claim the credit when you submit your return.
If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2009 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).
NEXT STEPS
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
- Fill out Form 5405 to determine the amount of your available credit, and
- File an amended return for your 2010 taxes, or wait and apply to credit when you file your 2010 tax return.
Find out how your tax credit can be applied to closing costs.
IRS RESOURCES
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