layin on the smackdown Posted February 6, 2010 Report Share Posted February 6, 2010 OK, so i have sent out my tax crap to my tax man, and he happened to call me today to confirm that he received it...we went through the bla bla bla and here is how much you will be getting back stuff...said bye, and hung up....I kind of thought my return was pretty weak (less than 1K) for being a new home owner etc. so i called him back and asked a few questions...I inquired about the tax credit thing for first time home buyers and what the deal was with that....he told me to send him the paper work from the closing (3/20/08) and that i would get an $8,000 tax credit or refund - i don't exactly remember what word he used, but i think it was "credit". What is a tax credit and how is it beneficial to me? Am i going to get a bigger return, or is this something that will benefit me the next time i purchase a home? I really have no idea what to expect from this... Also, i thought that $8,000 was the max you could get, and that it was all based on a percentage of what you paid for your home... Can anyone shine some light no this for me? thanks, dan Quote Link to comment Share on other sites More sharing options...
The_Kat Posted February 7, 2010 Report Share Posted February 7, 2010 Your tax man sucks if he didn't get this credit for you before you had to call him and ask about it. I don't know the rules on it, but I'm pretty sure you get a flat 8000$ credit, thus if your already getting a refund without it, then I imagine you can add 8k to whatever he gave you for the initial refund. Thats purely me assuming. Newarcher can prolly shed some light for you. My refund just hit this evening $$$$ Quote Link to comment Share on other sites More sharing options...
stevebeilgard Posted February 7, 2010 Report Share Posted February 7, 2010 sorry, no help here. but, i do believe that kat is correct, all from small talk and nothing from what i read. Quote Link to comment Share on other sites More sharing options...
92xj Posted February 7, 2010 Report Share Posted February 7, 2010 You will get a paper check in the mail for the 8k. Quote Link to comment Share on other sites More sharing options...
wtnhunt Posted February 7, 2010 Report Share Posted February 7, 2010 You will have to fill out a form 5405. The 2008 credit which was a $7500 credit was similar to a no interest loan and had to be paid back, the 2009 credit is a credit which does not have to be paid back. The credit is paid at a rate of 10% of the purchase price of the home up to $8000. There are other qualifying criteria. Here is some more information http://www.irs.gov/newsroom/article/0,,id=204671,00.html. We actually qualify for the $6500 "move up" or long time homeowner credit if we take occupancy of our new home by June 30th. Going to have to ammend my return though, I knew that before I filed. Quote Link to comment Share on other sites More sharing options...
MCH Posted February 8, 2010 Report Share Posted February 8, 2010 It's 10% of the purchase price of your new home not to exceed 8,000. Quote Link to comment Share on other sites More sharing options...
92xj Posted February 8, 2010 Report Share Posted February 8, 2010 Another question for the Tax experts. I received my W-2s in Jan. At that point I did not intend to purchase a home so I went on and filled them out and actually received the payments. Well, I placed an offer on a house and the buyer took it this weekend. I close early March. What did I do to get the home buyers tax credit? I have heard from a lot of people that once I sign at closing, I will receive the credit 6-8 weeks after if I claim it. Now, does this mean I need to "redo" my taxes for 2009, I do not want to wait till 2011 to get the credit back, because I will need to pay off the down payment loan that my parents are helping me with. Ideas? Dan, if this is hi-jacking your thread let me know and i will move it. Figured you got a pretty good answer to your question and we could turn this into a home buyers/tax credit Q&A. Quote Link to comment Share on other sites More sharing options...
Newarcher Posted February 8, 2010 Report Share Posted February 8, 2010 Another question for the Tax experts. I received my W-2s in Jan. At that point I did not intend to purchase a home so I went on and filled them out and actually received the payments. Well, I placed an offer on a house and the buyer took it this weekend. I close early March. What did I do to get the home buyers tax credit? I have heard from a lot of people that once I sign at closing, I will receive the credit 6-8 weeks after if I claim it. Now, does this mean I need to "redo" my taxes for 2009, I do not want to wait till 2011 to get the credit back, because I will need to pay off the down payment loan that my parents are helping me with. Ideas? Dan, if this is hi-jacking your thread let me know and i will move it. Figured you got a pretty good answer to your question and we could turn this into a home buyers/tax credit Q&A. You information is largely incorrect. You do not get an automatic check, you have to file form 5405 (use the new version of the form from the IRS website) and that form must be filed with a 1040 return. It isn't just a form you fill out and file by itself. You will also have to paper file and include the required closing documents on your home purchase. You have the option of including the credit--assuming there are no problems and you close before April 30th--in tax year 2009 or 2010. Assuming there are no income restrictions which would limit our credit, you can amend your 2009 return and include the credit or wait and file it with your 2010. Good luck and congrats on the home, New Quote Link to comment Share on other sites More sharing options...
Newarcher Posted February 8, 2010 Report Share Posted February 8, 2010 OK, so i have sent out my tax crap to my tax man, and he happened to call me today to confirm that he received it...we went through the bla bla bla and here is how much you will be getting back stuff...said bye, and hung up....I kind of thought my return was pretty weak (less than 1K) for being a new home owner etc. so i called him back and asked a few questions...I inquired about the tax credit thing for first time home buyers and what the deal was with that....he told me to send him the paper work from the closing (3/20/08) and that i would get an $8,000 tax credit or refund - i don't exactly remember what word he used, but i think it was "credit". What is a tax credit and how is it beneficial to me? Am i going to get a bigger return, or is this something that will benefit me the next time i purchase a home? I really have no idea what to expect from this... Also, i thought that $8,000 was the max you could get, and that it was all based on a percentage of what you paid for your home... Can anyone shine some light no this for me? thanks, dan Dan, You need a new tax man....any tax preparer who didn't ask you if you purchased a home/sold a home isn't someone you want to be dealing with. That question (and others) is standard fare in my client organizer. The tax credit is not a deduction, it is a tax credit. It is also refundable. What that means is that if you will be adding $8,000 to whatever refund he came up with (assuming you qualify and there are no income restrictions). Refundable means that even if you owe no tax, you still get the amount of the credit back from the government. The credit is calculated as 10% of your new home purchase price. A very very very important point that many preparers are failing to tell buyers (especially in this economy where people are having to move to find work or losing homes they cannot afford).....if you leave this new residence within three years, you have to pay the credit back. So if you aren't sure you will remain there, bank the credit money and do no spend it until you pass three years in the home. But seriously, you need a new tax advisor. New Quote Link to comment Share on other sites More sharing options...
wtnhunt Posted February 8, 2010 Report Share Posted February 8, 2010 What did I do to get the home buyers tax credit? I have heard from a lot of people that once I sign at closing, I will receive the credit 6-8 weeks after if I claim it. Now, does this mean I need to "redo" my taxes for 2009, I do not want to wait till 2011 to get the credit back, because I will need to pay off the down payment loan that my parents are helping me with. You can amend your 2009 return with a 1040x. My understanding is that you can have the credit direct deposited so long as you fill out all the information, however you do have to submit the forms through the mail. The folks at the IRS were actually fairly helpful, just expect if you call them to have to wait. Quote Link to comment Share on other sites More sharing options...
92xj Posted February 8, 2010 Report Share Posted February 8, 2010 You information is largely incorrect. You do not get an automatic check, you have to file form 5405 (use the new version of the form from the IRS website) and that form must be filed with a 1040 return. It isn't just a form you fill out and file by itself. You will also have to paper file and include the required closing documents on your home purchase. You have the option of including the credit--assuming there are no problems and you close before April 30th--in tax year 2009 or 2010. Assuming there are no income restrictions which would limit our credit, you can amend your 2009 return and include the credit or wait and file it with your 2010. Good luck and congrats on the home, New Thanks New! Very helpful and I appreciate your time in explaining it. So, I can't really do anything about it until I close. Once I have closing papers, its time to fill out the forms and send in. I close on March 15th, so I will not have to wait for 2011, correct? You can amend your 2009 return with a 1040x. My understanding is that you can have the credit direct deposited so long as you fill out all the information, however you do have to submit the forms through the mail. The folks at the IRS were actually fairly helpful, just expect if you call them to have to wait. I am willing to wait for the tax credit, haha. Thanks! This process is so confusing and a headache sometimes, but well worth it in the end I hope. Quote Link to comment Share on other sites More sharing options...
Newarcher Posted February 8, 2010 Report Share Posted February 8, 2010 Thanks New! Very helpful and I appreciate your time in explaining it. So, I can't really do anything about it until I close. Once I have closing papers, its time to fill out the forms and send in. I close on March 15th, so I will not have to wait for 2011, correct? Right, you have to have a closing statement (certificate of occupancy if building a home) to send in with form 5405. If you close on March 15th, just amend your original return for 2009 then. It should be pretty easy. Make sure you get the revised 5405 form from the IRS site. I would not wait to take the credit, I would get the money now. Who knows what 2010 and 11 will bring. New Quote Link to comment Share on other sites More sharing options...
92xj Posted February 8, 2010 Report Share Posted February 8, 2010 Right after closing, I will head to HR block. I dont want to take the chance of screwing something up. Yes, getting the money now is high priority for me. Thanks again for the help and info. Quote Link to comment Share on other sites More sharing options...
Newarcher Posted February 8, 2010 Report Share Posted February 8, 2010 Right after closing, I will head to HR block. I dont want to take the chance of screwing something up. Yes, getting the money now is high priority for me. Thanks again for the help and info. I would personally try an independent provider, I find H&R to be both very expensive and prone to miss deductions. I do free returns for Widows at my Church and H&R charged her $220 for a Federal and State when all the poor lady had was a W-2 and took the Standard deduction. Unconscionable. JMHO, New Quote Link to comment Share on other sites More sharing options...
92xj Posted February 8, 2010 Report Share Posted February 8, 2010 Want to make some money? jk Home inspection is scheduled for this Thursday. I will be there. One good thing about out here is there is ZERO humidity. That keeps a lot of things in better shape than most places. I went over the house for homes, poking and touching and pulling and it seems in very good shape. We will see what Thursday brings. I will check out some smaller indpendent people. Would rather go that option even for the same price. Good call. Quote Link to comment Share on other sites More sharing options...
Orion_70 Posted February 8, 2010 Report Share Posted February 8, 2010 You need to invest in turbo tax and get rid of your tax man... Quote Link to comment Share on other sites More sharing options...
wtnhunt Posted February 8, 2010 Report Share Posted February 8, 2010 I would personally try an independent provider, I find H&R to be both very expensive and prone to miss deductions. I do free returns for Widows at my Church and H&R charged her $220 for a Federal and State when all the poor lady had was a W-2 and took the Standard deduction. Unconscionable. JMHO, New Yep, or go with turbo tax like Orion mentioned. H&R block and Jackson Hewitt are ridiculous in what they charge and the people they have doing your taxes at those places follow a program similar to turbo tax. Turbo tax deluxe has all the right up to date forms including the 5405. Quote Link to comment Share on other sites More sharing options...
layin on the smackdown Posted February 8, 2010 Author Report Share Posted February 8, 2010 Dan, You need a new tax man....any tax preparer who didn't ask you if you purchased a home/sold a home isn't someone you want to be dealing with. That question (and others) is standard fare in my client organizer. The tax credit is not a deduction, it is a tax credit. It is also refundable. What that means is that if you will be adding $8,000 to whatever refund he came up with (assuming you qualify and there are no income restrictions). Refundable means that even if you owe no tax, you still get the amount of the credit back from the government. The credit is calculated as 10% of your new home purchase price. A very very very important point that many preparers are failing to tell buyers (especially in this economy where people are having to move to find work or losing homes they cannot afford).....if you leave this new residence within three years, you have to pay the credit back. So if you aren't sure you will remain there, bank the credit money and do no spend it until you pass three years in the home. But seriously, you need a new tax advisor. New Ok, so i bought this house in March of 08', so this march we will have been here for two years...We are actually in the process of putting our house on the market, and planning to sell within the year. If we do sell, i have to pay back the entire credit? Is this a federal law or requirement or does it vary from state to state? If this is the case, maybe selling is not such a good idea, unless the offer is to hard to let go...I'd hate to have to pay back the 8K...any suggestions? if i do get a job offer where we are looking to move, would the best bet be to continue to pay on the house until March of 2011, rent it out for a year, or sell it and pay back the 8K? that massively sucks...glad you mentioned that. This might get a little hairy if things go the wrong way. dan Quote Link to comment Share on other sites More sharing options...
wtnhunt Posted February 9, 2010 Report Share Posted February 9, 2010 Is this a federal law or requirement or does it vary from state to state? Federal, does not vary. Quote Link to comment Share on other sites More sharing options...
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