Are you one of the individuals who needs to repay the First-Time Homebuyer Credit? If you’re not sure, you can use an online look-up tool on the IRS website to check if you have a repayment obligation.

Here’s a link to the online lookup tool that will help you determine this information: https://sa1.www4.irs.gov/irfof-fthb/

Also, here are some tips to help you look up information about your First-Time Homebuyer Credit:

1. Determine if you need to repay the credit. If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan and must be repaid in 15 equal annual installments that began with your 2010 return. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009 or 2010.

2. The First-Time Homebuyer Credit Tool will provide critical account information to help you report your repayment obligation on your tax return. To access the online tool you will need:
-Social Security number
-date of birth
-complete address

If you file a joint return, you will only be able to access your portion of the First-Time Homebuyer Credit account information.

3. The online tool will show the original amount of the credit, annual repayment amounts, total amount paid and the total balance left to be paid. You will be able to print your account page to share with your tax preparer and keep for your records.

4. To repay the First-Time Homebuyer Credit, add the amount you have to repay to any other tax you owe on your federal tax return. This could result in an additional tax owed or a reduced refund. To repay the credit, you report the repayment on line 59b on Form 1040, U.S. Individual Income Tax Return. If you make an installment payment, you do not need to attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, to your tax return. However, if you are repaying the credit because the home stopped being your main home, you must attach Form 5405.

You can access the First-Time Homebuyer Credit Look-up Tool at any time, day or night.

Daniel Stoica Accounting Professional

If you are like many Americans, you usually pay someone to prepare your tax return.  As with any individual or company that you ask to perform a service for you, it’s a good idea to do some research before you choose a tax preparer.  Even if you have someone else prepare your taxes, you are still legally responsible for what is on your tax return.

Here are some tips for finding the best tax preparer for you:

-Ask questions. Ask the preparer how he/she keeps up to date on changes in the tax code and what, if any, organizations he/she belongs to that would provide continuing education and resources.  Effective 2011, all paid tax preparers must have a Preparer Tax Identification Number (PTIN) that must be renewed every year.

-Check out the preparer’s fees.  Preparers should not base their fees on a percentage of your refund.  Also, check out several preparers in your area to see what the average fee is.  The fees should not be either too high or too low for your area and type of tax return.

-Do not sign a blank return, and run away from any preparer who asks you to do so.  It is your duty to sign the forms after you review them.  Also, make sure that your preparer signs the forms and includes his/her PTIN.

-Choose a preparer who looks permanent.  It may be important to contact your preparer after your return has been filed, so it’s a good idea to use one who doesn’t have a “fly by night” sort of operation.  Ask for a referral from a trusted friend or relative, or take a look at online sites that provide user reviews.

-Inspect the preparer’s history.  You can always check the Better Business Bureau to see if a preparer has several complaints.  CPA’s and attorneys have their own regulatory organizations that you can check as well.

Daniel Stoica Accounting Professional