First Time Homebuyers: No (eFile) Soup For You!

If you’re planning to take advantage of the First-Time Homebuyer’s tax credit or the more recently announced “long-time homeowner new purchaser” credit – you will not be eligible to eFile your tax return when you claim the credit.  To find out more about these credits, see the article at this link.

In a move to reduce fraudulent claims, the IRS recently decided that in order to claim this credit, proof of the purchase of the new home must be attached to the return with form 5405 and the entire return must be paper-filed.

This will likely add at least a week to the processing time, and likely much more as the filing season progresses.  So if you’re claiming this credit, keep in mind that your turnaround for your refund will be extended specifically because of this credit.  I’m sure it will be worth the wait!

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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