If you purchase a principal residence in Auburn, WA on or after Jan 1, 2009, and before Dec 1, 2009, you can elect to take the first-time home buyer’s tax credit of up to $8000 on either your 2008 return or next year on your 2009 tax return.  The credit is equal to 10 percent of the home purchase price, up to $8000 limit. Here in Auburn, because home prices are higher than some parts of the country, the full credit will most likely apply.

According to the National Association of Realtors, there are a few filing options for the credit this year:

**If you purchase your home between Jan 1, 2009 and April 15, 2009, you can claim the $8000 credit on your 2008 return, due by April 15, 2009.

**If you are planning to close on your home after April 15,  but by October 15, you can file for an extension and just wait until the October 15th tax deadline to file your 2008 tax return to claim the credit.

**If you have already filed your 2008 return and qualify for the $8000 credit but want to take it this year, you can file an amended return on Form 1040X.

**You could also wait and take the credit on your 2009 tax return which is due April 15, 2010, or adjust your withholdings now to get the benefit before filing your return.  However, adjusting your withholdings now may be risky in case you cannot close the purchase before Dec 1, 2009.  Remember, closings MUST occur before Dec 1, 2009 (Not Dec 31st).

Posted on Wednesday, March 4th, 2009 at 1:53 pm and is filed under Questions and Answers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.