I know relatively little about the credit so please pardon my ignorance. My understanding is that depending on when the Home was Purchased, there might be two years in which it is possible to claim the credit. Obviously one factor in the decision is when the taxpayer gets the money - sooner is better than later. But are there any sets of facts where the same home purchase will get more on one year than on the other? The way I read what I have seen, the answer to my question is "no" but I want to be either reassured or corrected. Thank you for your patience.
-
-
Sooner vs later may not be a choice for the FTHB credit - it's going to be later. Assuming a house purchased in 2009, claiming it on the 2008 taxes requires an amended return. The IRS had announced delays in processing these returns last year. Twelve weeks was not uncommon. This after they had reassigned hordes of people specifically to process the FTHB returns. Now that tax season is upon us, I assume these people will be going back to their regular assignments.... My understanding is that depending on when the Home was Purchased, there might be two years in which it is possible to claim the credit. Obviously one factor in the decision is when the taxpayer gets the money - sooner is better than later.
Claiming the FTHB credit on a 2009 return requires the new form, which is scheduled to be released January 10. It cannot be e-filed; it must be manually submitted with documentation of the purchase. I don't know if the IRS will be assembling a special processing unit for the FTHB, but I would expect a longer than normal processing time. The TIGTA did not have nice things to say when he testified before congress about suspected fraud in the FTHB credit. I can't imagine that the IRS would decrease the amount of time it spends examining a claim before sending out a check for $8,000 of "free money".
On balance, I would go for the 2009 submittal, but not make any promises to the client on timing. -
You are correct. The amount of the credit will be the same regardless of which tax year they choose to claim it.Originally posted by erchess View PostYou have the right to remain silent. Anything you say will be misquoted, then used against you.Comment
-
Many Thanks
to both of you and while I'm at it, many thanks to all the people who make comments on this board. I have learned more from you folks than I could even begin to list.Comment
-
One thing
that might make a difference for some clients. If they qualify for the income limits in one tax year but not the other, than that can be a deciding factor. And I think it will be so for more home purchased in 2010 than those purchased in 2009. Hopefully many incomes will be higher in 2010 than 2009.AJ, EAComment
-
Fthc
I'm going to E-file their 2009 return, print out a 1040X for the FTHB.
Instruct the taxpayer to mail the 1040X when they receive their FULL refund as calculated. If the refund differs, I'll have then come in for a corrected 1040X.Confucius say:
He who sits on tack is better off.Comment
-
Amend 2008
The interest earned on the refund is a tidy sum.
Plus you can't efile a return claiming the credit.Comment
-
Is this necessarily true though? I have seen clients get interest on their refund when submitted on a 2008 tax return. I'm not sure how this works, whether interest is based on filing deadline of 2008 return or date of purchase. Or whether or not they'll continue to pay that interest when it's filed on a timely filed 2009 return (though I doubt it.) So it is possible that the taxpayer could receive a few hundred extra dollars filing an amended 2008 as opposed to a 2009, depending on how exactly they calculate the interest and when the home was purchased.Originally posted by WhiteOleander View PostComment
-
I have not heard from any of my cllients regarding interest received on their fthbc. So, that may be a factor. I was only addressing the amount of the actual credit.Originally posted by David1980 View PostYou have the right to remain silent. Anything you say will be misquoted, then used against you.Comment
-
One of my clients received a substantial amount of interest added to the $8,000 first
time home buyers credit and refund claimed on a 2008 1040-X.Comment
-
Define "substantial". I'm thinking only in terms of about $32, give or take.ChEAr$,
Harlan Lunsford, EA n LAComment
-
At the 4% interest rate, if they purchased the home April 15th 2009 and file their 2009 return on April 15th 2010, receive exactly 1 year of interest for an amended 08 and no interest for an 09, you would have $320 in interest by filing the amended return.
Since I can't imagine many prepares charge that much to preparer an amended return it's a significant amount of interest. Of the 4-5 I've seen, the most interest was roughly $200. But I'm still not sure from what time they start accruing the interest, whether it's the filing date of the 08 return (4-15) or the date the home was purchased.Comment
-
Duh! 4% of 8,000 is not the $32 I quoted elsewhere. Must be rusty being away from
tax season so long. Mea culpa.
I wondered about the date when interest started too, but was told on good authority that
it is just like any other amended return and accumulates from back when original return
was filed.ChEAr$,
Harlan Lunsford, EA n LAComment
Comment