Las Vegas Sun

March 28, 2024

Homebuyers hustle to get credit in tax off-season

First-time homebuyers comprise a large percentage of sales in the Las Vegas housing market, and claiming their windfall from the federal government has kept tax preparers a little busier than normal in the offseason.

Congress extended the $8,000 credit for first-time homebuyers last month and expanded it to other buyers who can receive up to $6,500.

“We are getting a lot of calls and have done quite a few,” said Roni Kerfien, a tax preparer at Roni Deutsch Tax Center. “We have done a lot of our competitors’ (clients) because for many tax preparers this is their off-season.”

Bernadette Mashas, a tax manager at Fair, Anderson and Langerman, said the expansion of the tax credit Nov. 6 has created some confusion among buyers who have called to seek clarification.

Some existing homeowners who bought a home thought they were eligible for the $6,500 tax credit, but it only applies to those who closed Nov. 6 or later, Mashas said.

To get the credit, buyers need to fill out Internal Revenue Service Form 5405, amend their tax return with Form 1040X and attach the final settlement statement to their return. That is a new requirement under the law, Mashas said. That may prevent some from filing their 2009 tax returns online because there is no procedure to include the settlement statement with the filing, Mashas said.

Filing electronically ensures a prompt payment, but Mashas said that change in the law means that if buyers want to get reimbursed quicker, it’s best to amend their 2008 return.

The tax credit has been extended until April 30 for signing the contract with the purchase required to be completed by June 30, Mashas said. Congress would have to act for the credit to be extended beyond that.

The person has to live in the home for 36 months or must repay the tax credit, Mashas said. It is not that hard to do, but if people are confused or don’t feel they are capable of amending the return, Mashas said they should hire a tax specialist.

That’s what Kerfien suggested that because many people have found it confusing to fill out the amended returns and the IRS will send it back if anything is filled out incorrectly. For some people, it might take three or four times to get it right, Kerfien said. Having an expert can cost $95 to $150, she said.

“It can take a lot longer to get your credit (doing it on your own),” Kerfien said.

Buyers are disappointed to learn they may not qualify for any or only a partial tax credit based on their income, Mashas said.

The limit to receive the full tax credit is $225,000 for married couples, an increase from $155,000 before Nov. 6, she said. Couples who earn $225,000 to $245,000 receive only a partial credit; it’s eliminated after $245,000, she said.

Individuals are allowed to earn up to $125,000, an increase from $75,000, Mashas said. The credit is eliminated after $145,000.

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