Extra paperwork required for Homebuyer Tax Credit

By Laura Geller - bio | email

RICHMOND, VA (WWBT) – If you're planning on taking advantage of the First Time Homebuyer Tax Credit, you're going to need to make a trip to the post office. You're also going to have to send more paperwork than just a simple tax form.

A town home in Ashland is Michelle Corridon's dream house.

"The day I closed I slept here. I slept on floor. I was so excited," she said.

That mindset wasn't always there. In fact, Corridon wasn't sure she was ready to jump into the market until she added a great deal and the Homebuyer's Tax Credit into her financial picture. For this year the government will give you 10 percent of the purchase price or $8000, whichever is less. And for the first time, homebuyers don't have to pay back any of that money.

"When I added it all up it was like 'oh gosh I've got to dive into home ownership right now,'' Corridon said.

She began filing online, as she always does, but when she got to the tax credit section she realized there'd actually be paper and postage involved. The IRS requires homebuyers mail in both Form 5405 and proof of purchase in settlement papers. H & R Block Tax Master Candance Griswold told us the change is to prevent fraud.

"That form includes the address of the property, the buyer, the seller, the date it was sold and the price it was sold for," she said. "All of those things they were not able to substantiate in the prior year."

With all that paperwork and so many people taking advantage of the credit, it could take months before you see your "free money."

"It is money I wasn't going to have anyway, so I'll be patient," said Corridon.

The post office at 1801 Brook Road is the only one in our area staying open late April 15. Retail windows will be open until 8 o'clock. It will also have personnel on hand to collect mail until midnight.

Remember, if you're mailing in those settlement papers, make sure you only send the copies to the IRS. Keep originals in your personal files.

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