How to File Your Taxes With House Tax Credits
First-time home buyers from 2008, 2009 and 2010 are eligible for a tax credit. This tax credit reduces your tax liability or adds to your normal tax refund. While all first-time home buyers purchasing homes in 2008, 2009 and 2010 are eligible for this credit, the process is slightly different depending on the type of home you purchased. Also, the IRS does require some home buyers to give back the credit they receive after a period of time.
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Things You'll Need
- Form 1098
- Mortgage iInterest statement
- Substitute mortgage interest statements
- Property tax records
- Homeowner’s insurance records
- IRS form 1040x
- IRS form 5405
- Form HUD-1
- Settlement statement
- Retail sales contract
- Certificate of occupancy
Instructions
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Verify that you're eligible for the credit. The IRS only issues the tax credit if you purchased your home in 2008, 2009 or 2010. If you purchased your home in 2010, you could claim the credit on your 2009 tax return or your 2010 tax return. If you failed to claim this credit, you must file an amended 1040x tax return with the IRS.
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Get the IRS form 5405 from your local IRS office or online (see references). This form is for "First-Time Homebuyer Credit and Repayment of the Credit." Fill out this form in its entirety with the information about your purchase.
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Submit the form with your tax return. Include form HUD-1 with the form 5405 and your tax return. If you purchased a mobile home, and do not have a settlement statement, include the executed retail sales contract. If you purchased a new construction home, where there is no settlement statement, include a copy of the certificate of occupancy for the home.
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Tips & Warnings
The tax credit is $7,500 for homes purchased in 2008, and is $8,000 for homes purchased in 2009 and 2010. For homes purchased in 2008, the credit is similar to a no-interest loan, and must be repaid in 15 annual installments starting with the 2010 tax year.
Long-term home owners are also eligible for this tax credit. You must have lived in your home for five consecutive years out of the last eight years before purchasing a new main home. The IRS recommends attaching either form 1098, Mortgage Interest Statement, substitute mortgage interest statements, your property tax record or your home owner's insurance records when you file for the tax credit.
