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Tuesday, January 19, 2010New Home Buyer Credit
New Homebuyer Credit Form 5405 Released
The IRS released the updated Form 5405 that is to be used to claim the First Time Homebuyer Credit under the revised rules. The IRS is expected to begin processing these forms in mid-February. Qualifying homebuyers can now start to file their 2009 tax returns.
Note: No EFiling allowed. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.
When will I get my refund? For those taxpayers that are able to file early may see tax refunds take an additional two to three weeks.
In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement
- 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.
For taxpayers claiming the $6,500 credit (homeowners who have lived in their home 5 consecutive years out of the past 8 years) must also show documentation. The IRS encourages homebuyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement,
- Property tax records, or
- Homeowner's insurance records.
In general, it takes about four to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. For those homebuyers filing early, the IRS expects the first refunds based on the homebuyer credit will be issued toward the end of March. By having your refund directly deposited will help speed up this process.
For additional resources taxpayers can go to the IRS website at www.IRS.gov. Here they can look at FAQs on the Homebuyer Credit and also check the status on their refund claim by clicking under “Where’s My Refund?”
Circular 230 Notice: IRS regulations require us to advise you that, unless otherwise specifically noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, by any taxpayer for the purpose of avoiding tax-related penalties imposed under the U.S. Internal Revenue Code or any other applicable state or local tax law provision; furthermore, this communication was not intended or written to support the promoting, marketing or recommending of any of the transactions or matters it addresses.
Greg Nelson, CPA, MBT
Principal
Olsen Thielen CPAs & Consultants
952.941.9242
Posted By: Ryan O'Neill @ 1:19:30 PM