Send in a Paper Tax Return to Get Homebuyer Credit

As a tax preparer, I  normally file all of my client tax returns electronically.  However, for this tax season, for all of my clients that are claiming the homeowner credit, we will need to send in a paper return to the IRS.  Many farmers may qualify, either for the first time credit of $8,000 or the long-time ownership credit of $6,500.

To claim the credit, you will need to fill out form 5405.  For the first time credit, you will need to attach either of the following to the tax return:

• A copy of your closing statement from the home purchase, or
• If purchasing a mobile home, a copy of the retail sales contract, or
• If building a house, the certificate of occupancy and most likely the bills from the contractor to back up the cost claimed on the form.

If you are claiming the long-time credit (which means you lived in the same house for five consecutive years), you will most likely need to provide five consecutive years of either:

• Home mortgage interest statements,
• Real estate tax records, or
• Homeowners insurance.

The IRS has indicated they will not start processing any of these returns until mid-February and the soonest that any refund checks will be mailed will be around late March.

Remember, if you are claiming the homeowner credit, file your return by mail.