Posted on March - 28 - 2010
Deadline For First Time Home Buyers Credit Is Fast Approaching
Deadline For First Time Home Buyers Credit Is Fast Approaching., Although there are many critics out there who claim that the first time home buyers credit, which was put into effect back in 2008, did not have the impact that officials expected it to on our battered economy. Still there are a lot of consumers who decided to take advantage of the tax incentive offered by the Federal Government who may not have otherwise bought a house within the last few years. The fact that home prices are lower now than they have been in a long time has also been a huge incentive for potential homebuyers to consider buying now rather than later.
Even though the program was supposed to end at the end of last year the Federal Government had once again decided to extend the program but this time it will not last until the end of the year. The upcoming deadline, according to the IRS, states that a potential homebuyer interested in the tax credit must have signed a binding sales agreement by April 30, and the home purchase must be completed by June 30. This is really putting these potential buyers in a race against time to make sure they have the credit score they need and can find the right home within the short period of time that remains in order to be eligible for the program.
As far as the paperwork goes, it is actually quite simple to claim this credit on your tax return. You must use the IRS form 5405 along with a copy of your HUD statement and send them in with your return. IRS form 5405 is a fairly simple form to fill out and it is just used to determine how much of the tax credit you are allowed to claim. That’s because in order to be eligible for the full $8,000 credit you must be purchasing a home of equal to or greater value than $80,000. The program states that you may qualify for a credit of 10% of the purchase price with a maximum of $8,000 so if the home you are thinking about buying costs $50,000 than your credit would be $5,000. After calculating this amount all you have to do is add it to line 67 of your 1040 for a 2009 tax return.
Most real estate experts will currently tell you that this past winter has been a horrible one. Unfortunately it has nothing to do with all of the severe winter storms the nation has recently experienced. It is more about the lack of sales and the amount of properties that remain sitting with a for sale sign in the front yard. Some are hoping that with the weather finally starting to break and with spring around the corner that hopefully, just hopefully, the housing market will start to pick up again.
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