• Yes but do it before you get married or she will be disqualified because of your prior home ownership. Also be sure the place she buys is one she (or both of you) will be living in for the next three years or she will owe the credit back.
I've already amended my return once for something else. Can I amend for the Homebuyer credit?
• Yes and you should. There is no limit to the number of amended returns you can file but if you don't file and something spikes your 2009 income you may find yourself ineligible on your 2009 tax return.
I bought just before the credit got announced. Can I get more back?
• Generally no with one exception. If you claimed the $7500 credit which was good between April 9, 2008 and July 1, 2009 on your 2008 tax return because you had purchased a home after January 1, 2009 but before the $8000 credit was announced you could amend the 2008 return to reflect the new credit.
I'm separated from my husband. He owns a home which he lives in but my name is not on the deed or mortgage. If I claim the credit how would the IRS know?
• A spouse owning a primary residence disqualifies you from the credit even if you don't live in the home or with him. If you filed for the credit you would likely get it but it is equally likely the IRS will eventually figure this out especially since, in the case of tax fraud which this would be, they have 7 years. The way they would figure it out is when your spouse claims home interest or property taxes or sells the house they will match his return against yours and flag the credit to be reclaimed with the associated penalties and interest.
Can I use the credit for a downpayment?
• You can only file for the credit once you have closed on the house so the short answer is no however HUD has approved lenders who want to offer secured loans backed by the anticipated credit for precisely this use. Check with your lender to see if they have programs available.
I'm purchasing a home through a land contract. Am I eligible for the homebuyer credit?
• Generally no however depending on State law maybe yes. For instance, in Michigan the Realtor Association has a writeup supporting claiming the credit (I have a copy).
I owed no taxes in 2008. How do I get the credit?
• The Homebuyer tax credit is a refundable credit which means you get it in cash even if you owed no taxes. If you filed a return in 2008 have us amend that return. If you didn't file because you weren't going to owe anything we can file the 2008 return for you.
I am seperated from my spouse (4 years ago) and considered unmarried, and qualify for the unmarried head of household. My spouse owns a home which she has rented for the past two years. She lived in it before then. If I buy a home now that otherwise qualifies can I claim the credit?
• No. Section 36(c)(1) requires that the taxpapyer and the taxpayer's spouse not have an ownership interest within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of the previous home on the other spouse. The taxpayer may not take the credit even if filed on a separate return.
Is there a deadline for filing an amended return?
• The deadline to amend the 2008 return is April 15, 2012. Normally after 12/31/2009 you would just claim the credit on your 2009 tax return filed in 2010 UNLESS your income in 2009 is over the limit. Then you would still want to amend the 2008 return.
I'm cosigning my daughter's home loan. She is a first time buyer but I already own a home. Is she still qualified?
• Yes she is still qualified and would get the full credit. You cosigning the loan and being on the deed does not disqualify her. You would not be leigible for any of the credit. She is the one who would need to file an amended return.
I'm on disability income and don't file a tax return. Am I eligible for this credit?
• Yes you are. We would file a 2008 Federal Tax Return for you showing zero income and the credit. Since this is a refundable credit you would get the $8000. Even better, since you hadn't previously filed we could file it electronically meaning you would get the refund back in 10-15 days (amended returns must be paper filed). We charge $150 for this service.
I'm building a home. Am I eligible?
• Yes but you MUST move in by November 30, 2009. You can't claim the credit until that has occurred.
I've heard the credit may get increased. What if I've already amended my return to claim the credit?
• There are some bills before Congress proposing increasing the amount of the credit. If any of these pass we could amend your return a second time.
I file as a sole proprietor.
My accountant went into unexpected surgery in April and his staff could not find my paperwork so I filed for an extension. I left the USA on job asignment back in early June and have been unexpectly extended to August 20 obviously beyond the extension period.
What can I expect as a penalty for filing on the 21 or 22?
• An extension to file does not give you an extension to pay taxes.
The penalty in your case would be interest at the federal rate (5-7%) on the underpaid amount.
In theory, you could request a waiver based on the extenuating circumstances - but the IRS could question what type of efforts you or your accountant's staff did to try and get copies of the paperwork from the original sources. If it was relatively easy to get copies of the paperwork (i.e. you file 1040EZ), then your chances are probably not great. The more sources of paperwork you have I think the more the possibility of a waiver would increase.
"The IRS may waive the penalty for underpayment of estimated tax in situations that involve hardship or unusual circumstances. The penalty can be waived if the IRS determines that the imposition of the penalty would be inequitable or against good conscience because of a casualty, disaster, or other unusual circumstances. Code Sec. 6654(e)(3)(A). For example, the waiver could be granted to a taxpayer whose books and records were destroyed by fire or other casualty, or if payment was not made because of the death or serious illness of the taxpayer. 5 The IRS also has granted waivers to provide relief to taxpayers affected by changes in the tax law. 10"
Remember these other circumstances would automatically eliminate any penalties:
- You paid 90% of the current year total tax due.
- You paid 100% of the tax that was due on the prior year. (Provided the prior year consisted of 12 months). If your Adjusted Gross Income is over $150,000 then the applicable amount is 110% of the prior years total tax due.
Beggining in 2009, this general rule is modified; instead of the 100% or 110% described above, the taxpayer can pay 90% of the tax due on the prior year if the individuals AGI for the preceding year is less than $500,000 ($250,000 if married filing separately) AND 50% of said income is derived from a small business (Less than 500 employees). Code Sec. 6654(d)(1)(D).
Amended returns impact these calculations.
Timing is important; each quarterly payment must be 25% of the required amount.
There are exceptions. One of them is:
6654(e)(1)WHERE TAX IS SMALL AMOUNT.— No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax), reduced by the credit allowable under section 31, is less than $1,000.
If you still have questions, please contact us and we will gladly answer them.