hat is the Credit?

The first time homebuyers tax credit can provide an excellent opportunity for new home buyers.

Earned Income Credit

You could receive as much as an $8,000.00 tax credit if you qualify and you are purchasing a new principal residence between January 1st, 2009 and December 1st, 2009. This is a small window to purchase so if you have been thinking about it, now is the time.

How Do I Qualify?

You are eligible for this credit if you meet the following criteria:

•You have not owned a principal residence in the three years prior to claiming the credit.
•The home purchased cannot be a vacation or rental purchase.
•The home must be considered your primary residence.
•The credit is available for individuals making less than $75,000.00 per year and couples making less than $150,000.00 per year.
•The purchase of the home must be complete before claiming the credit.
How Do I Claim this Credit?

Federal Inheritance Tax

If the purchase of your home is complete by December 1st, 2009 then you will claim this credit on Form 5405. This is a form that you will attach with your 1040 filing Form.

Do I Have To Repay This Credit?

Gift Tax Exclusion

Unlike in previous years, you will not have to repay this credit. This is an expansion of the previous first time homebuyers tax credit that was offered as a part of The American Recovery and Reinvestment Act of 2009.

To claim your first time homebuyers tax credit, visit TurboTax Online.

•If you do a 401k rollover into an IRA you’ll still be hit with the minimum distribution tax.
That’s basically it, but there are online tax services such as TurboTax Online that will help you with each step through the process of paying the taxes on your 401K early tax withdraw. They also have an assortment of tax calculators that will pinpoint what’s possible for you in whatever unique tax situation you may be in.