The April 30^th deadline is only SEVEN weeks away.  Is your credit score ready to help you qualify for a mortgage and take advantage of the tax credit? 

The time for a credit check up is NOW.  When you find errors on your credit report, you need to have some time for the corrections to be recorded and for the credit building actions you take to have a positive impact on your scores. 

With the 2009 income tax filing date so close to the homebuyer’s tax credit date and all the talk about “taxes” right now,  we went to CPA Janet Davis of Trusted Advisors Consulting to get the facts.  Ms. Davis has over 15 years of experience and works with clients in several states.

Who is a first time homebuyer?

For the current tax credit, first time homebuyers are defined as someone who has not owned a home in the past three years.  If a first time homebuyer enters into a contract to purchase a home by April 30, 2010, and the purchase closes by June 30, 2010, the homebuyer can qualify for up to an $8,000 federal income tax credit.  

NOTE: If you are a qualifying first time homebuyer and you purchase your home in 2010, you can claim the tax credit on either your 2009 or your 2010 income tax return.  If you’ve already filed your 2009 return, you can amend that return to claim a refund, says Ms. Davis.

Are you a long time homebuyer?

A long time homebuyer is someone who has owned a home for at least 5 out of the last 8 years and decides to purchase a new home.  They can qualify for long time homebuyer’s tax credit.  Like the first time homebuyers credit, the long time homebuyer’s credit of up to $6,500 is also available for homes in contract by April 30, 2010 that close by June 30, 2010.  The long time homebuyer’s credit can also be claimed on the 2009 or 2010 income tax return, and the 2009 return can be amended to claim the credit.

NOTE: High income taxpayers do not qualify for the credits.  The Internal Revenue Service (IRS) article provides information on the income limits for this tax credit and your tax advisor can help you determine your eligibility.  

MILITARY AND FEDERAL EMPLOYEES
The tax credit may be extended for one year for certain active military and federal employees currently serving overseas.  The IRS provides some information here.  Again, check with your tax advisor to learn more.

The Homebuyer’s Tax Credit will be beneficial to many tax payers.  Be sure you are working with a team of licensed and experienced professionals.  Your realtor, lender and tax advisor can guide you to a happy home purchase that gives you full benefit of all that the current market and regulations have to offer.

Thank you to Janet Davis of Trusted Advisors Consulting for sharing her expertise.

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