Homebuyer Credit – Form 5405
On 1/15/2010 the IRS released the new form and applicable instructions necessary for claiming the homebuyer tax credit. Form 5405 is to be used for both ‘first-time homebuyer’ filers ($8,000 max credit) and, what the IRS is calling the ‘long-time resident of the same home’ filers ($6,500 max non-first-time homebuyer.)
Here are two quick bits of information that are sure to save you time, headache, and hassle.
1. 2009 returns MUST be filed on paper (you cannot eFile)
DO NOT let this credit effect your buying decision, but if you were already planning to take advantage of the homebuyer tax credit on your 2009 income tax return you MUST file your return on paper – you CANNOT eFile.
I touched on this point briefly in the article Tax Credits for Home Buyers and Owners but wanted to remind everyone once more in hopes that it might save someone the trouble of a rejected credit/tax return.
2. Homebuyer credit eligibility – no more guesswork
IRS form 5405 and its instructions remove any ‘guess work‘ regarding eligibility for the credit.
If you are unsure whether or not you qualify for the credit, simply download the form and instructions below and read them to determine your eligibility. As much as I would love to answer every eligibility question here, it is better for each of us to read the information and apply it to our unique situation accordingly.
Down load form 5405 and the applicable instructions here:
Betterment is offering a $25 bonus for all new accounts! They've created an awesome way for the Average Joe to save and invest simply and effectively. There are no minimum balance requirements and no transaction fees. Read my Betterment Review or open an account to claim your $25 bonus now.