Thursday, April 02, 2009

First Time Home Buyers - Don't File Your 2008 Tax Return!

First Time Home Buyers -
Don't File Your 2008 Tax Return!

If you already did, don't fret. You can still amend it. I've been talking about the 1st time home buyer tax credit that the federal government is giving to 1st time home buyers that close by November 30. 2009. Well, did you know that you don't have to wait until you file your federal return in 2010 to receive this credit? That is why I am telling you to hold off on filing your 2008 federal tax return until after you buy a home. You can file an extension and receive another 6 months to look for your dream home - until October 15th! This only applies if you are due a refund. If you owe taxes to the IRS then, unfortunately, you still need to pay those by April 15th. But you can still get your Tax Credit quicker (see below)

Now if you haven't filed your 2008 tax return yet, and you buy a home by October 14th, you can file your taxes the next day and have that $8,000 check in your hands in 7-10 days! (along with any other refund due you) How many of you think that you will have some expenses after you buy your new home (repairs, updates & improvements, new furniture, etc.). All of you, I'm sure.

Now if you have already filed your tax return, don't worry. All that means is that you will have to wait a little longer for your tax credit check. When you close on a new home (using an Armstrong Field buyer agent, of course!) you can file an amendment to your tax return and have your check before your 2nd mortgage payment is due. The IRS is telling us that it is taking about 8-10 weeks to process amended tax returns. As we get closer to the November 30th deadline, you can bet that time is going to be longer.

The Massachusetts Association of REALTORS is predicting that come this summer that home buyers are going to be scrambling to find a home to take advantage of the tax credit. Remember, you must close by November 30, 2009 at the latest. If you close on December 1st - no $8,000! That means you need to have an accepted offer by October 15th at the latest. If something happens that delays the closing, it could jeopardize your tax credit. That's why we are recommending that you start seriously looking now.

The other reason to buy a home sooner rather than later is because of competition. Right now, while the market is getting busier, there is nowhere near the frenzy like there is going to be as we move toward the end of the summer and early fall. There are plenty of homes to choose from right now, and we can normally negotiate a price to quite a bit under the asking price. In the summer when the activity picks up and the properties on the market start receiving more homebuyer traffic, the sellers are going to be more choosy, and may hold out for a better offer.

For more information on the 2009 Home Buyer Tax Credit, go to:

Jim Armstrong
Armstrong Field Real Estate

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