Please note: this post is merely intended as a broad overview of information found on the IRS.gov website and is not intended to substitute for the advice of a tax professional.
As we’ve mentioned in prior posts, the first-time homebuyer tax credits were extended and expanded back in 2009, allowing even more people to take advantage of the program. But if you bought your home in 2009, how do you make sure you actually see that credit on your upcoming tax return?
According to the IRS, there will be even more compliance checks this coming tax season because of the numbers of people applying for the credit, so it pays to have all your paperwork in order.
Tax guidelines for first-time homebuyers
Taxpayers who claim the credit on their 2009 tax return must file a paper return (no electronic submissions) and attach Form 5405, “First-Time Homebuyer Credit and Repayment of the Credit,” along with one of the following forms of documentation:
- For purchasers of conventional homes, a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names and signatures, property address, sales price and date of purchase.
- For purchasers of mobile homes who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Long-time homeowners who have purchased new homes
For long-time homeowners who have purchased a new main home, they first must qualify by living in their old homes for five consecutive years out of the last eight year period ending on the purchase date of the new home. According to IRS recommendations, these homebuyers should also attach these additional documents to prove their prior home ownership:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
- Property tax records or
- Homeowner’s insurance records.
More information, including how to file for the refund on 2008’s taxes, is available at the irs.gov article here.
If you haven’t yet taken advantage of the first-time homebuyer tax credit and homeowner extension, talk to Susan Stecher about finding a Pacific Northwest home that’s just right for you and your family!
Photo credit: Steve Wampler