New information on the first time home buyer tax credit.
CNNMoney.com released an article that is causing many people to be confused. The article talks about how first time home buyers will no longer be able to e-file their taxes if they want to receive the tax credit. This article is misleading to many.
To read the article click here.
I spoke with several CPA's today and now I understand the article. If you have already closed on your house prior to filing your taxes then you will not be able to e-file your taxes. The reason for this is that there was a lot of fraud. People were buying houses and claiming them as their first home purchase when in fact they owned investment properties or were not even claiming their purchase as a primary residence. Now the IRS is requiring that a separate form 5405 be mailed to them along with a copy of the closing report and a copy of your drivers license to prove that this is your first home purchase and to insure that you are using it as your primary residence.
If you are planning on filing your taxes and THEN closing your house before June 30th (remember you must be under contract by April 30th) then you can still e-file. You will e-file your taxes and will have your tax return to show to your lender. Once you close on your house you will need to amend your taxes and will then have to mail the IRS a copy of the closing report and a copy of your drivers license. It will be 1-5 months before you receive your tax credit check.