Common Misconceptions About First Time Homebuyer Credit - Do You Qualify for the $8,000 Tax Credit?
The first-time homebuyer tax credit can be as much as $8,000 for qualified home sales before December 1, 2009. Taxpayers can claim the credit on Form 5405.
One of the biggest misconceptions about the first-time homebuyer credit is that not everyone qualifies. Taxpayers must be qualified buyers and satisfy income requirements. Individuals must have a modified adjusted gross income of less than $75,000 to qualify for the full amount (for couples it’s less than $150,000).
Additionally, a lot of people are including the credit on their tax returns even though their escrow hasn’t closed. They think that since they have entered into an agreement to purchase means that event qualifies them for the first time homebuyer credit – but now they have to amend their tax returns. The IRS will not allow taxpayers to claim the first-time homebuyer credit in advance of a purchase – so you can only claim the credit once title passes to the taxpayer (escrow closes).
It’s important to know the First Time Homebuyer Tax Credit Rules to stay out of IRS trouble.
If you are unsure about how to amend your tax returns or handle your current tax problems,let our team of tax attorneys and tax specialists help you! Contact us today for a free consultation. Call us at 866-IRS-PROBLEMS (1-866-477-7762) or visit our website at www.TaxResolution.com
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