Homebuyer’s Tax Credit – The Countdown Is On!

If you plan on taking advantage of the homebuyer tax credit, whether you are a first-time homebuyer or a long-time homeowner, your time is running out. You must enter into a binding contract on or before April 30, 2010, or you will miss the opportunity to save some money.

If you haven’t already, check with an experienced Florida Mortgage banker for pre-qualification, so you know how much house you can realistically afford. In addition, here is a quick rundown of some rules you should be aware of, before taking the plunge:

- You must enter into a legal real estate contract to purchase a primary residence by April 30, 2010.

- The closing must take place by June 30, 2010.

- You have the option of claiming the credit on either the 2009 or 2010 tax return.

- Buyers must attach an executed Settlement Statement to their tax return.

- The home purchased cannot be more than $800,000.

- The homebuyer must be at least 18 years of age (for couples, one person must be 18).

- The homebuyer cannot receive a credit if being claimed as a dependent.

Members of the military and certain other federal employees serving outside the U.S. have an extra year to purchase their primary residence in the U.S. – making their deadline to enter in to a contract April 30, 2011 and to close by June 30, 2011. Check with the IRS or your Accountant for further details.

Not just for first-time homebuyers –

If you are a long-term homeowner, you are not left out of the new tax break either, but you also must follow some rules. You must have lived in your primary residence – the same home – for five years in a row during the eight year period that ended on the date you closed on your new home.

If you qualify, you may be able to claim a homebuyer credit of up to $6,000, or up to $3,250 if you are married filing separately. The new law that extended and expanded the November 6, 2009 law also raised the income limits for homes purchased after that November date. It phased out the credit for couples filing jointly who had a modified adjusted gross income of $225,000 to $245,000, as well as for individual filers with MAGI of $125,000 to $145,000. Note – The original credit phase-out of $150,000 to $170,000 for couples and $75,000 to $95,000 for individuals still apply for home purchases on or before that November 6, 2009 date.