First-Time Homebuyers Credit

The first-time homebuyer credit is a new tax credit that was created by the Housing and Economic Recovery Act of 2008. If you purchased a home in 2008, the credit acts like an interest free loan.  This credit must be paid back on your tax return over the course of 15 years.  For homes purchased in 2009, the amount of the credit increased and the requirement to repay the credit was removed, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.

The amount of the credit for 2008 is 10% of the purchase price of your home with a maximum credit of $7500.  For 2009, the maximum credit is $8000.  This is true for both single taxpayers and married filing jointly taxpayers.  For married filing separately taxpayers they credit is half of the total. 

To qualify for the credit for either year you need to have purchased a principal residence in the United States between April 8, 2008 and December 31, 2009.  You also need to have not owned a princed residence at any time during the 3 years prior to the date of purchase of your new home.  For example, if you owned a home and sold it in 2004 and started renting and then decided to purchase a new home in 2009 you would qualify for this credit as a first-time homebuyer.

This credit is claimed on your tax return using form 5405 and can be filed with either your 2008 or 2009 tax return.  For help claiming the credit on your 2008 or 2009 tax return feel free to visit our website at http://www.huddlestontax.com/.

 

 

Jessica Chisholm, CPA
Seattle/Bellevue Tax Accountants
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Seattle CPAAbout Seattle CPA
Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.

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Huddleston Tax CPAs of Seattle & Bellevue
Certified Public Accountants Focused on Small Business

(800) 376-1785
40 Lake Bellevue Suite 100, Bellevue, WA 98005

Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching, Quickbooks consulting, bookkeeping, payroll and business valuation services for small business. We serve Seattle, Bellevue, Redmond, Tacoma, Everett, Kent, Kirkland, Bothell, Lynnwood, Mill Creek, Shoreline, Kenmore, Lake Forest Park, Mountlake Terrace, Renton, Tukwila, Federal Way, Burien, Seatac, Mercer Island, West Seattle, Auburn, Snohomish and Mukilteo. We have a few meeting locations. Call to meet John Huddleston, J.D., LL.M., CPA, Tawni Berg, CPA, Jennifer Zhou, CPA, Jessica Chisholm, CPA or Chuck McClure, CPA. Member WSCPA.