Independent Contractor Compliance Blog - by Collabrus™

Although this may not directly relate to running a business or to IC Compliance, it is a change that may affect some of your staff.

The Internal Revenue Service announced this week that taxpayers who qualify for the first-time homebuyer credit and purchase a home before December 1 2009, have a special option available for claiming the tax credit either on their 2008 tax returns due April 15, 2009 or on their 2009 tax returns, due April 15, 2010. Timing is everything as to which return you may claim it on, but otherwise, taxpayers get to choose which year…

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

How much credit can you get?

“Qualifying taxpayers can get up to $8,000, or $4,000 for married filing separately,” according to the IRS.

Who qualifies?

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

Use Form 5405 for the credit

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates the new provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.