There could be a nasty surprise in store for homebuyers who took or are planning on taking advantage of the home buyer tax credit. The IRS is giving behind-the-scenes instructions to CPAs and tax advisors on how to file for the home buyer tax credit after Nov 6, 2009.
The procedure will be significantly different than what was needed to do previously to claim the credit and this difference will probably make a few people upset, even tax preparers. What’s worse is these instructions are not available to the general public.
If you purchased a home on or after November 7, 2009:
- You cannot file a 1040 EZ to claim the tax credit.
- You must file tax returns via the mail if claiming the tax credit.
- You must attach the HUD 1 or closing statement be attached to the Tax Credit IRS form 5405.
- If you are filing an amended return, the IRS may request additional documentation. The IRS is telling tax advisers to expect an average of a 16-week turn around time before you figure out whether or not you’re getting a refund or you’ll need to send more documentation.
What’s even more confusing, there will be TWO versions of the 5405 form, one for homes purchased on or before November 6, 2009 and one for homes purchased after November 7, 2009. If you’ve purchased a home after November 7 and want to download the amended form from the IRS website, this is what you’ll find:
Changes have been made to the first-time homebuyer credit by Public Law 111-92, the Worker, Home ownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009. As a result, the 2008 Form 5405 can be used only for homes purchased before November 7, 2009, for which an election is made to claim the credit for 2008. We will soon issue a December 2009 revision of Form 5405. The December 2009 revision will be for use for all homes purchased after November 6, 2009 (whether the credit is claimed for 2008 or for 2009) and for all claims on 2009 returns for homes purchased any time in 2009.
In other words, they haven’t finished figuring out how they want to change the form, so the form is not even available yet. Hope they get their act together soon. Tax filing deadlines are rapidly approaching.
Have you purchased a home to take advantage of the new tax credit after November 6 th? Were you aware of the changes in tax filing procedures? Tell us about it by leaving a comment!
Source: http://brokeragentsocial.com
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