Thursday, June 10, 2010

Filing the First Time Homebuyer's Credit

I've been procrastinating on this one, big time. I hate even thinking about taxes-- even when I know I'm getting money back. I even thought about paying someone to do this for me, but I figured it can't be that hard, and I want my full $8,000! But I just did it, and it's not that bad, really. Here's how I did it, step by step. By the way, I'm clearly a first time homebuyer, and I was in contract before April 30, 2010, and closed in May, 2010. I decided to file the credit as an amendment to my 2009 return.

1) I dug up a copy of my 2009 tax return. That was pretty easy-- I efiled with Turbotax, so the PDF was right on my computer.

2) I found the envelope with all of my closing documents, that my lawyer handed to me after the closing. I know this is totally negligent-- it's been floating around on the backseat of my car since my closing, almost a month ago! I'm going to file it away properly right after I finish this, I promise. The form you'll need is the HUD-1 form-- which, thankfully, was clearly titled and happily sandwiched away among all sorts of other incomprehensible documents.

3) I needed two forms from the IRS website: the 5405 and the 1040x. I printed out the forms, and downloaded the PDF instructions (i1040x) and (i5405), just in case.

4) Filling out the 5405 was really easy. Answer the questions, find your purchase price (it's on the HUD-1), enter your "modified adjusted gross income" from your 2009 return, make some calculations, which happily add up to an $8000 credit!

5) Next, fill out the 1040x. A little more complicated, but not so bad, if you have your 2009 return in front of you. Basically, it asks you to re-enter a bunch of the number from your 2009 return. Then on line 14, you get to check the box next to 5405 (which you just filled out) and enter your $8000 credit. And if you got all the numbers right, it all adds up to an $8000 credit in the end.

6) So in reading the directions, I discovered there is one more document you want to include-- your original contract, which shows you were under contract before April 30th.

7) Then, you just put everything in an envelope-- the 1040x, the 5405, a copy of your HUD-1 and a copy of your contract (if you closed after April 30, 2010) and mail it to the IRS. The mailing address is on page 5 of the 1040x instructions. Why they can't put it on the form, or at the end of the instructions, I have no idea...

Hopefully I'll get a check in awhile... the directions say 8-12 weeks, but I've heard that it can take up to 4 months.

My disclaimer: I'm definitely not an expert on taxes-- I'm just sharing my own experiences!

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