Tom Wurdack

Options for first-time homebuyers to maximize their tax credit

Washington – As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service (IRS) has begun a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer tax credit for 2009 home purchases.

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they have already filed their tax return.”

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchased a home before Dec. 1 receive up to $8,000 or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Here are the filing options you should consider:

File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days after their electronic submission with direct deposit.

File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who are considering buying a house in the next few months can file their return now and claim the credit later in the year with an amended return.

Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.

Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file their 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. Typically this would affect people who have less income in 2009 than in 2008 because of factors such as a job loss or a drop in investment income.

Source Link: Options for Filing

Recovery Link: Recovery.gov