Tax Tip - Review your 2009 Tax Return to determine the need to Amend the Return.

If you forgot to include some income or to take a deduction or to claim a credit(including the first time homebuyer or repeat homebuyer credit) on your tax return – you can correct it by amending your tax return.

Generally, to claim a refund, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040, 1040A or 1040EZ. Be sure to check the box for the year of the return you are amending on the Form 1040X, Line B. The newly revised Form 1040X (Rev. January 2010) has only one column used to show the corrected figures and an area on the front of the form where you explain why you are filing Form 1040X.

Closing Deadline Extended - Eligible Homebuyer Credit

Eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April now have until Sept. 30, 2010 to close the deal.

The Homebuyer Assistance and Improvement Act of 2010, signed by the President, extended the closing deadline from June 30 to Sept. 30 for any eligible homebuyer who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010.

Expanded Homebuyer Tax Credit

First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, get a tax credit for 10% of their purchase price, capped at a maximum of $8,000.
To qualify for the new tax credits, buyers must sign a purchase agreement by April 30, 2010, and close escrow on the deal by June 30, 2010. So the earlier deadline of closing before December 1, 2009 has been extended.

Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence, may also be eligible for up to a $6,500 tax credit.
To qualify for the new tax credits, buyers must sign a purchase agreement by April 30, 2010, and close escrow on the deal by June 30, 2010.
The information is not clear as to whether the homebuyer can convert the existing home to a second home, rental property or investment home....so we will have to wait for the fine print..

How to get the First Time Home Buyer Credit ASAP

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

The filing options to consider are:

File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.


File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.


Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.


Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

Source: http://www.irs.gov/