It might seem like a long time for to claim your $8,000 tax credit, but seeing that August just rolled around. There are 120 days left to purchase a home and benefit from the tax credit. The last day is November 30, 2009 or before December 1st ,2009 depending on how you look at it.
Time might sneak up if you are just scratching the surface of pursuing a home purchase. There was talk of extending the tax credit but that has gone some what quiet over the past month.
Better start looking
Because of the time constraints, time is starting to not be on your side. The basic home buyer typically starts the home search about 4-6 months before really getting involved (ie: getting pre-approved, hammering out locations). More so the information gathering stage.
Typical time line of the buying process
From the time you get pre-approved for a loan and actually sit down and discuss what you can afford, it takes about 1-2 weeks until the home search starts. So that puts you to mid August
Then the home search, unless the stars align and you find the house you are looking for the first shot. The typical home buyer will look at will take about 6-8 weeks depending on schedule to find their home and make an offer. Now your looking at mid to late September.
Next comes making the offer and negotiating which can run about a week until final acceptance upon both parties. Looking at a closing date is anywhere from 30-60 days out and might run longer with the new rules put into place involving HVCC. Unless you are a highly qualified buyer with a decent down payment and can do some sort of streamline loan, plan on the 30-60 day period for loan fulfillment.
Quick Hitters On $8000 Tax Credit… Again
Now if you haven’t owned or maintained a home in the last 3 years, the IRS says you qualify. If you are a couple or married, then both have to be first time home buyers to qualify.
There are some exclusions:
- If your lucky enough to have a home gifted to you or inherit it from that rich uncle, you don’t qualify
- You make more than $95,000 on separately filed tax return.
- If taxes are filed jointly and income is greater than $170,000.
Also the one might not get the entire $8000 housing tax credit as it based on 10% of overall purchase price and it starts to disappear the more one makes.
If you move, sell or for some reason it is not your primary residence within three years, the IRS is going to get their money back.
Not going anywhere, then you have nothing to worry about.
If you qualify then claiming is fairly pain free, just close on your home on by November 30, 2009 and fill out form IRS Form 5405.
Now it is important to understand that I’m not an accountant or pretend to play one anywhere. If you seek further assistance then you might want talk to your friendly neighborhood tax professional. If you use a box, then you might want find a friendly neighborhood tax professional which can always offer better assistance.
If you are a first time home buyer and want to reach out with a general question, go ahead and contact me here.
