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Claiming the Homebuyer Tax Credit on Your 2009 Returns

So, you took advantage of the $8,000 first-time homebuyer tax credit, or the $6,500 repeat-buyer tax credit, and you’re sitting pretty in your new dream home. You can’t wait to claim your credit on your 2009 taxes, but you’re not exactly sure what documentation you’ll need to do so. What do you do now?

The Internal Revenue Service has posted on its web site the revised Form 5405 that you’ll need to file when preparing your 2009 taxes. The new guide describes exactly who qualifies for the credit, what documentation you’ll need to submit when filing and how to go about filing for your 2009 taxes.

Read on to learn exactly what you’ll need to claim the homebuyers tax credit on your 2009 returns.

Tax filers should be aware that they must file a paper tax return, and will not be eligible to e-file, because of the added documentation requirements. They may still use the IRS Free File to prepare returns, but they must be printed out and sent to the IRS along with all required documentation.

The documentation to include with your tax files are: 

-         A copy of the settlement statement showing all parties’ names and signatures, property address, sales price and date of purchase. Normally, this is the properly-executed Form HUD-1, Settlement Statement.

-         For mobile home purchasers 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 certificate.

 If you’re a repeat-buyer, you should also include evidence of longer-term ownership and occupancy of the previous house for five consecutive years, including:

-         Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements

-         Property tax records

-         Homeowner’s insurance records

Allow for about four to eight weeks to get a refund claimed on your complete and accurate paper return where all required documents are attached. To speed up the refund process, it’s recommended you use direct deposit.

Do you have further questions about claiming the homebuyers tax credit on your 2009 taxes, or about the tax credit in general? Ask a knowledgeable Realtor for help and guidance through this process or visit the First-Time Homebuyer Credit page on IRS.gov.

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