Sunday, January 17, 2010

First Time Homebuyers

Tax time is here. If you've purchased your first home in 2009 and qualify for the first time homebuyer tax credit, you'll need IRS form 5405 to accompany your taxes.

The Internal Revenue Service has just issued its first formal guidelines for you.

Wait until later this month when the agency publishes its revised Form 5405 with the key instructions needed to get you a check from the government.

Download IRS Form 5405 in pdf at

The forthcoming version of the form will incorporate the major changes to the tax credit program made by Congress in legislation signed by President Obama on Nov. 6. These include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

In a tax bulletin issued just before Thanksgiving, the IRS emphasized that all home purchasers after Nov. 6 "must use this new version [of Form 5405] to claim the credit." Put another way: If you send in the old version -- the one you can currently download from the agency's website, -- your request for the credit will probably go nowhere.

Then again, you may want your tax advisor to handle all this.

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