How To Get Tax Credit For Buying A Home

Discover how to get tax credit for buying a home and make the biggest investment of a lifetime a fiscally sound one. Even though there are not that many hoops to jump through, it pays to gather a few documents and get ready:

• Closing documents
• Five years of utility bills for the long-term credit option
• State-specific documentation

Although discussing how to get tax credit for buying a home with a realtor is a good idea, it also pays to talk to a tax accountant for the more intricate impact the credit will have on a tax payer’s bracket. Finally, claiming the credit takes a number of detailed steps:

1. Decide on the tax year. Learning how to get tax credit for buying a home requires meticulous adherence to the reporting rules. For example, claim a 2008 credit on the 2008 return. A credit for a 2009 purchase may be marked on the 2008 or 2009 returns. For 2010 home buyers, the options are the 2009 or 2010 tax returns. Amend already filed tax returns, if needed.
2. Calculate the credit. Newly-minted 2009 homeowners qualify for up to $8,000, while 2010 buyers could receive between $6,500 and $8,000, without the need for future repayment.
3. Mind the cut-off dates! For 2010 home buyers, finding out how to get tax credit for buying a home requires a May 1, 2010 closing date. State credits may be even more restricted--depending on the availability of funds. For example, California ended its credit application acceptance as of August 16, 2010. Taxpayers building a home have until June 30, 2010 to close on the home for the sake of the federal credit.
4. Find the workarounds. Even if a perusal of the IRS guidelines on how to get tax credit for buying a home does not seem like it is a workable solution at this time, remember that there are sometimes backdoors to still walk away with at least some funds. For example, long-time homeowners were previously barred from applying for the credit but may now do so, if they can prove that they have owned and lived in the same house for at least five consecutive years.

Keep in mind that tax rules are complex and change frequently. Rather than conservatively erring on the side of caution and leaving money on the table, invest in the services of a tax accountant and find out how to get tax credit for buying a home, even if it looks like you might have missed a deadline or two.