The $8000 the tax credit - can you qualify? 

Of course, buying a home is a major life decision. It’s one millions of Americans make every day. And one you can make too.

Purchase a home on or before April 30, 2010, and get up to $8,000 through the extended 2009-2010 tax credit. But you must act quickly to find and buy your home before this legislation expires.

What is the $8000 tax credit?

In November, 2009, The Worker, Homeownership, and Business Assistance Act extended the previously passed tax credit of up to $8,000 for qualified first-time home buyers who purchase a principal residence. A primary or principle residence is the property or dwelling where you, as the owner, live the majority of the time.

Who are first time buyers?

Any individuals or married couples who have not bought a primary residence in the last three years qualify as first-time homebuyers for the purposes of the tax credit.

Timing:

To get the tax credit, you must close on your home purchase by April 30, 2010 and live in the home for 36 consecutive months. So, plan on staying put for at least three years. You’ll keep the money and set yourself up for potential value appreciation, in addition to other benefits, such as equity buildup and tax advantages. And if you have to move, then you’ll just repay the money.

Income:

If you file your taxes as an individual, you will qualify as long as your income does not exceed $125,000 (up to $145,000 adjusted gross income).

If you file jointly, you and your spouse will qualify as long as your combined income does not exceed $225,000 (up to $245,000 adjusted gross income).

Documentation:

Upon closing, keys and titles are transferred, and you’ll need to fill out IRS tax form 5405 and send it along with a copy of your HUD-1Settlement Statement to the IRS. Upon receipt, the IRS will review your documentation. If it’s approved, they’ll send you a check for up to $8,000 in about 60-90 days. It’s that easy. BUT, keep in mind that if you owe the IRS any money, they will take whatever you owe first and then send the remainder your way.

If you’re interested in learning more about the new tax credit or about homes in your area, speak with a local real estate agent soon.