Time’s Running Out for the First Time Home Buyer’s Credit
Liberty Tax Examines the Tax Breaks for Home Owners
(Virginia Beach, VA) Qualified first time home buyers and others who previously owned a home have a May 1st deadline to close on a home in order to take advantage of the first-time home buyer’s credit. First-time home buyers who have not owned a principle residence for three years prior to the purchase of a new home can take a credit of up to $8,000.
“First-time home buyers claiming the credit must file a paper return that includes Form 5405 and additional documentation,” commented John Hewitt, CEO of Liberty Tax Service. “Generally, that’s a copy of the HUD-1 settlement statement or a retail sales contract if the home is a mobile home.”
“Long-time home owners” may qualify for a credit of up to $6,500. To qualify, the homeowner must have owned a home and used it as a principal residence five of the last eight years ending on the date the new residence was purchased. To act on this credit, all eligible taxpayers must have a purchase contract for a principle residence in force before May 1, 2010, and must close on their home purchases before July 1, 2010.
For homes purchased after November 6, 2009 there is an upper limit on the purchase value of the home of $800,000 to be eligible for the credit.
Residential energy tax credits are back as a provision of the economic stimulus package. Some home improvements made in 2009 and 2010 to increase the energy efficiency of your home may have a silver lining at tax time. Insulation, energy-efficient exterior windows, doors, certain heat pumps, and energy-efficient heating and cooling systems may qualify for a tax break. These improvements may qualify for a credit of 30% of their costs up to $1,500. Residential energy credits apply to homes, houseboats, mobile homes, condominium, and qualifying manufactured homes in which you live, and include the costs of certain items and the labor costs.
All devices must meet the new energy efficient requirements. To document these home improvements, homeowners should save all receipts, the Manufacturer’s Certification Statement, and Energy Star labels for exterior windows and skylights. There will no longer be a cap on the 30% tax credit for solar water heaters, geothermal heat pumps and other alternative energy equipment installed in a home in 2009.
About Liberty Tax Service
Liberty Tax Service is the fastest growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 7,000,000 individual income tax returns. With 41 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service (NYSE:JTX).
Liberty Tax Service provides computerized income tax preparation, electronic filing, refund loans, and online filing through eSmart Tax. Each office offers customers audit assistance, a money back guarantee, and free tax return checking. The Liberty Tax Service franchise opportunity is #9 on the fastest growing franchises list of the 2010 Entrepreneur “Franchise 500.”