Tax Credit Extension

In order to apply for a homeowner tax credit extension, there are processes that need to be observed. However, you just need to follow some of the steps provided below to give you better directions when filing a tax credit extension application.

1. Determine your eligibility. Secure a 5405 form and read the eligibility requirements provided therein before signing up for the application. If you purchased a home between the periods of December 31, 2008 and December 1, 2009, you are eligible for $8,000 tax credit. Home purchases made between April 8, 2008 and December 1, 2009 are eligible for a $7,500 credit payable in fifteen years. The property that was bought should have been the primary residence of the homebuyer where he/she must not have previously owned a home property for a minimum of three years before present purchase has been made. The homebuyer applying for the tax credit extension should have an AGI or adjusted gross income must be under $75,000 for individuals and $150,000 for married couples filing jointly.
2. Visit the IRS website and use the search box to look for the 5405 form. A PDF file of the form is available ready for download. This is the form that first time home buyers will need to fill up when applying for a tax credit extension.
3. Fill out the form and provide necessary information being asked for. To prevent delays in processing your application, it is necessary that you fill out the form appropriately. Be sure that you have all the necessary details for your eligibility to claim for tax credit extensions. Fill out general information which includes your demographics and your purchase details. Check box C if your home was purchased between December 31, 2008 and December 1, 2009. This is important for those claiming the $8,000 non payback grant. For those claiming $7,500 tax credit payable in fifteen years, you should not check this box. In the part II section of the application you are going to fill out either ten percent of home purchase or $8,000 as the max tax credit. Enter the Modified Adjusted Gross Income, you can find this from your tax return form 1040. Perform the calculations indicated and enter the tax credit amount on line six. Follow the proper calculations and enter the tax credit amount at line six.
4. Double check your 5405 form. The last and final step in a homebuyer’s tax credit extension application is to double check the entire form for mistakes and missed out information. If everything else is correct, attach the 5405 form to your tax return form 1040, and submit to the IRS.