Below, we summarize TurboTax Facebook Fan questions and answers by Bob. In fact, it was such a popular one participant and blogger summed it up on his blog, Mortgage Report.

We decided to solicit a couple of additional questions about the Homebuyer Credit via Twitter, and Bob’s responses to those new questions are below. At the end of the post, you’ll see the full list of Q&A from yesterday’s chat, or take a look on the Facebook Page. For an in-depth overview of the Homebuyer Credit, check out this post by Bob on our blog.

Twitter Questions:

Q. My wife & I purchased our home last month. Should we amend our taxes our wait till we do our taxes in March/April?

A. Because it sounds like you purchased your house after Nov. 6, you’ll have to file for the Homebuyer Credit on your 2009 return. Along with the return, you’ll have to include the settlement statement to support the claim for the credit. Filing an amended 2008 return is not an option because of when you purchased your home.

———————

Q. My former home owner wrote a check for property tax, but I purchased before tax date and reimbursed. Did he pay the tax or did I?

A. The settlement statement will show the proportionate tax applicable to the seller and buyer (you). Even though the former owner paid for the full year, your reimbursement for the months you lived in the house qualify you for a deduction for that amount you paid.

Facebook Questions:

Q. What if a buyer’s federal tax obligation is less than the tax credit? Does the buyer receive the full amount or just an amount up to his/her federal tax obligation?

A. The Homebuyer Credit is a “refundable” credit, which means that you get the full credit regardless of your tax liability. In other words, the IRS will send you a check if your credit is more than the tax liability/withholding.

———————

Q. What will be the earliest day I will be able to file online this year?

A. TurboTax Online is up and running now. While not all IRS forms are final yet, most should be final by Jan. 1, 2010. So get ready and get going. By the way, if you’ll be claiming one of the Homebuyer Credits, you may have to wait a few weeks because the credit form for this won’t be final from the IRS until sometime in January.

———————

Q. Can you tell folks the top 3 things EVERYONE should know about this credit?

A. 3 things you need to know about the Homebuyer Credit:

1. The credit is available to first time AND existing homebuyers. The credit amounts are $8000 and $6500 respectively. And pay attention to the rules. For example, a first time buyer simply means you have not owned a principal residence in the last three years.

2. The purchase date has been extended to June 30, 2010, but you have to have a signed contract in place by April 30, 2010.

3. Those claiming a Homebuyer Credit on their 2009 return will have to paper file the return. The IRS will NOT accept the return electronically because they need a copy of your settlement statement to substantiate your purchase. Having to file a paper copy of your return is big disappointment because it will delay your refund from days to weeks.

———————

Q. If the transaction closes on or after Jan. 2, 2010, can the home buyer still claim the tax credit on their 2009 tax return? If the transaction closes after April 15, 2010 (but before June 30, 2010), would they file an amended return for 2009?

A. The beauty of the Homebuyer Credit is that you can get the credit dollars pretty fast. So, if you purchase in 2010, you have the option to claim the credit on your 2009 return (either the originally filed one or even an amended return). By doing so, you get your credit dollars relatively soon versus having to wait to claim the credit on your 2010 tax return which would be filed in 2011.

———————

Q. Would a current homeowner be eligible for the extended Homebuyer Credit if they purchased a second home in another state this year? They did not sell their current home, but were told by their Realtor that they can claim the credit.

A. As long as you owned and lived in the existing home for at least five consecutive years of the eight years prior to the purchase date of your new home, you may qualify. There are other requirements like income and purchase price, but otherwise you should qualify. By the way, there is no requirement that you sell your existing home.

———————

Q. Just sold a piece of farm land that was part of an inheritance. I will have to pay Capital Gains tax. Do I have to pay an estimated tax in January for this tax?

A. Depending on the amount of the gain, you may have to pay estimated taxes by Jan. 15, 2010. It all depends on how much the gain was. There are (complicated) rules that govern whether you have to pay estimated taxes. For example, if your tax payments (like withholding taxes) by end of year cover 90 percent of your tax liability for 2009, you more than likely will not have to pay estimated taxes. Any balance you owe would be paid at the time you file your return. Also, for most filers, if the taxes you paid by end of year equal or exceed your 2008 taxes, then you won’t have to pay estimated taxes. Without knowing more about your specific tax situation, I’d guess that you will not have to pay estimated taxes. I would suggest, however, that you use TurboTax now to find out if you’ll have to pay estimated taxes.

———————

Q. Can [you] file [through] Turbotax.com with the Homebuyer Credit [or do you] need to go [through] [H&R] or [Hewlitt Packard]?

A. You can use any version of TurboTax to claim the first time Homebuyer Credit. However, you won’t be able to file until sometime in January when the IRS releases the final form for claiming this credit. Also, those claiming the credit will have to paper file their return because of the IRS requirement to attach your closing statement. This paper filing requirement is true for ALL filers, regardless of whether you use tax software or go to a pro.

There’s been a lot of talk – and confusion — about the homebuyer credit. Part of the confusion can be attributed to the fact that Congress made at least 3 major changes to the homebuyer credit over the last couple years. So let’s try to make some sense of it. Rather than focus on what each of the changes are, I’m going to talk about what homebuyer credits are now available and how you qualify.

But first, let’s get rid of some of the confusion brought on by the first homebuyer credit in 2008. Initially, the first-time homebuyer credit applied to homes purchased during a period in 2008. It was a $7,500 “credit” that despite its name required you to pay back the $7,500 credit over 15 years. So it wasn’t really a credit, but a loan. That is now history so you can forget about this “credit.”

For 2009 there is now a true homebuyer credit (one that does not require you to pay it back… unless you sell it within three years) worth up to $8,000. While most of the attention has been focused on the first-time homebuyer, the credit has been expanded to include “repeat” buyers—worth up to $6,500.

To qualify for the first-time or repeat homebuyer credit, you have to meet several qualifications including home ownership and income tests. First-time homebuyers must not have owned a home in the last three years. Repeat homebuyers require home ownership for five consecutive years of the last eight years. The income test is described in the table below and is based on when you purchase your home. One thing to note about the income test is that the credit is reduced when your income exceeds the base income amount and the credit is completely wiped out when your income is $20,000 above the base amount. Not surprisingly, the homebuyer credit rules can become quite complex and that’s where TurboTax comes in. TurboTax walks you through a series of simple questions to determine eligibility and then computes your credit. You can wrack your brain trying to figure all this out, or just let TurboTax do the hard work for you.  But since the Congress just passed the repeat homebuyer credit, you are going to have to wait until January to claim the credit on your return to give the IRS some time to update the tax forms.  Bottom line, though, you could see your refund soar by $8,000!

This is such great news to homebuyers that it’s likely to tempt those who are looking to make a fast buck illegally. To mitigate fraud, the IRS requires documentation in the form of a completed settlement statement be attached to your tax return. As a result, homebuyers claiming the credit in 2009 will be unable to electronically file their return. While this will delay your refund by weeks, it still makes for a nice refund when it comes.

With home prices down, mortgage rates low and sweet credits available from Uncle Sam, now is a great time to purchase a home. Visit our web site for more information on the homebuyer credit.

The credit is designed to save the real estate industry from abject failure during the recession and recovery, creating a temporary incentive which might encourage more people to buy houses. The National Association of Realtors estimates that 335,000 out of the 1.8 million home buyers who will have qualified for the tax credit by the end of November 2009 would not have purchased their new houses if not for this credit, so the incentive may be working.

Home buyers purchasing a house in 2009 have the option of filing an amended income tax return (1040X) for 2008 to receive a credit if it wasn’t claimed on the original income tax return for 2008. Although it originally took six weeks for the IRS to send tax credits to home buyers filing amended returns, as the volume has increased there may be a longer delay. It may save time and effort spent on paperwork to claim the credit on the 2009 income tax return filed early in 2010.

There may not be a better time to buy a house in terms of price and availability. Unfortunately, many people are having a difficult time qualifying for good mortgage interest rates or, in some cases, any loan at all. Now that the recession is officially over and the economy is beginning to improve in all but the job market, we’ll see fewer tax incentives designed to stimulate the economy. If you can, and if the timing is right for you, consider taking advantage of the home buyers’ tax credit and any other credits the government has made available.

Because it’s been several months since the act was first rolled out, I thought I’d revisit some specifics about the incentives, as well as any related deadlines. Hopefully you can find something here that applies to you and your particular situation.

Buy a Car: New Car Sales Tax Deduction

If you purchase a new car, light truck, motor home, or motorcycle you may be eligible for a federal tax deduction of the state and local taxes you pay on the new purchase. That probably amounts to around $2,000 in tax deduction for a $20,000 car. Depending on your tax bracket, you could save around $500 in taxes. The deduction phases out at certain income levels, and only applies to cars under $49,500. Deadline: Purchase the new vehicle by December 31, 2009

Economic Stimulus: The News Car Sales Tax Deduction

Buy a House: First-Time Homebuyer Credit

Probably the most discussed incentive found in the ARRA, the first-time homebuyer tax credit is a refundable credit applied to your 2009 tax liability. If you haven’t owned a home in the last three years can get a credit of up to $8,000 towards the purchase of a new home. The credit is phased out for certain income levels. This credit was recently extended. Initial Deadline: Close on the sale by November 30, 2009 ~ Extended Deadline: April 30, 2010 (for sales contract); June 30, 2010 (for closing)

Upgrade to a Better House: Long-Time Homebuyer Credit

President Obama just signed into law the Worker, Homeownership, and Business Assistance Act of 2009. This law extends the deadline created for the first-time homebuyer credit. It also creates a credit of up to $6,500 for current home owners to purchase a new home. You must have owned your current home for the past five years. The credit is phased out for certain income levels. Deadline: April 30, 2010 (for sales contract); June 30, 2010 (for closing)

Improve Your Current House: Home Energy Efficient Credits

The tax credit normally provided for energy efficient improvements to your home has been increased this year to “30 percent of the cost of all qualifying improvements”. Improvements that qualify include things like insulation, energy-efficient windows, and energy-efficient heating and AC units. Deadline: Place the improvements in service by December 31, 2010

Buy a Computer with College Savings: Certain Computer Technology Purchases Allowed for 529 Plans

You can now include computer equipment and Internet service in the cost of your child’s education when cashing out those 529 Plan funds. Deadline: Spend the 529 Plan funds by December 31, 2010

Go to College: Tax Credit for First Four Years of College

The stimulus created the American Opportunity Credit, which broadens coverage of the existing Hope Credit for years 2009 and 2010. This applies to only the first four years of college. The maximum annual credit of $2,500 is available for qualifying students. Income limits apply. Deadline: December 31, 2010

For more information about the tax incentives found in the ARRA, see the IRS Information Center.

Caution: Incentive Shouldn’t Always Equal Action

It’s important to point out that just because these incentives are available, you shouldn’t necessarily run out and buy something. Each purchase decision should be made carefully, and other factors (beyond tax incentives) should be considered.

Caption: WoodleyWonderWorks

Don’t dawdle if you hoping to take advantage of the $8,000 First-Time Homebuyer Tax Credit .

To qualify you have to “close the sale” before Dec. 1 (not at year’s end as you might expect).

Closing the sale means that you officially own the home on or before November 30.

If you’re negotiating with the seller or even in escrow when the deadline hits, that won’t cut it.

Or, as the IRS puts it, “you may not claim the credit in anticipation of a purchase that has yet to happen.”

Because the credit is such a hefty sum, the IRS is monitoring taxpayer claims closely for possible fraud.

So get going.

Once you’ve got a purchase agreement and loan approval, it could take 30 or even 60 days to seal the deal. And you don’t want to be caught in a last-minute land rush of first-time homebuyers.

After all, the credit is a great deal.

It could put as much as $8,000 in your pocket. And you don’t have to repay it, as long as you live in the home for at least three years. You also must meet certain other requirements.

To learn more, read Taking the New 2009 First-Time Homebuyer’s Credit and First-Time Homebuyers Credit: 7 Surprising Facts.

With good planning, you could be “home” for the holidays.

You’ve probably heard of the First-Time Homebuyer Tax Credit, a popular tax break that’s part of the 2009 economic stimulus plan.

If you buy a home between January 1, 2009 and November 30, 2009 — and you qualify — the government will give you up to $8,000. And you don’t have to repay it, as long as you live in the home for at least three years.

First-Time Homebuyers Credit - Economin Stimulus

This tax credit has some interesting twists that just might help you qualify:

• First off, you don’t necessarily have to be a first-time homebuyer.
• The home you purchase doesn’t have to be a house.
• Someone else, such as a friend, relative or a parent, can help pay the mortgage, and you get the credit.
• If you want to rent out part of your main home, you can still qualify to receive the credit.

To get the details, read more about the homebuyer’s credit.

First-Time Homebuyers Credit

It’s all over the news. If you buy a home between January 1, 2009 and December 1, 2009, you could qualify for a big homebuyer tax credit.  It’s worth as much as $8,000 or 10 % of your home purchase price, whichever is less.

To be eligible, you can’t have owned a principal residence during the three years prior to purchase date and your adjusted gross income or AGI can’t be more than $95,000 ($170,000 if filing married joint). AGI is basically your taxable income before you subtract your standard or itemized tax deduction and exemptions.

In Live Community, we’re seeing lots of questions about who gets the tax credit if an unmarried couple (or siblings, fishing buddies, sorority sisters, etc.) buys a home in 2009. Let’s say the home’s price is $60,000. Since each person files a separate tax return, does each person get the $6,000 ($60,000 times 10%) credit? Nope!  There’s only one credit per home – but the buyers can divvy it up in many different ways.

The IRS says that the taxpayers can allocate the tax credit in any “reasonable” manner as long as they don’t give the credit to someone who is ineligible for the credit. Huh?

Let’s look at some of the possibilities.

Sam and Suzy have dated forever and decided it’s time to buy a $100,000 house.  It’ll be a first-time purchase for both of them.  The maximum credit for this home is $8,000.

Example 1: Sam plans to pay $30,000 and Suzy to pay $10,000 toward the down payment. They will both be jointly liable for the remaining $60,000 mortgage and have one-half interest in the home as tenants in common. Sam’s adjusted gross income (AGI) is $60,000 and so is Suzy’s.

Option 1: Based on contributions to the purchase, Sam could get 60% of the $8,000 credit or $4,800. Here’s how his 60% is figured:  $30,000 down payment + $30,000 mortgage share /$100,000 purchase price  = 60%.

Suzy could get 40% of the $8,000 credit  or $3,200. That’s $10,000 down payment + $30,000 mortgage share / $100,000 purchase price = 40%.

Note:  Sam’s $4,800 credit plus Suzy’s $3,200 credit equals $8,000.  The total of the credits can’t be more than $8,000.

Option 2: Based on their ownership interests, they could each get 50% of the $8,000 credit, or $4,000.

Option 3: 100% of the credit could go to either Sam or Suzy because both are eligible for the credit.

Example 2: Same as example 1 however Sam’s AGI is $100,000 and Suzy’s AGI $50,000.

Option 1:Since Sam’s AGI is greater than $95,000, he is not eligible for the credit so Suzy takes all of the credit.

Example 3: Same as example 1 however Sam owned a home from 2000 and sold it in 2007.

Option 1: Since Sam owned a home in the 3 years prior to the new purchase, he isn’t eligible for the credit. Just like example 2, Suzy can get all of the $8,000 credit.

Example 4:Same as example 1 however Sam’s AGI is $85,000 and Suzy’s is $60,000. Note:  If the AGI is between $75,000 and $95,000, the amount of homebuyer credit allowed is “phased out” the closer the AGI gets to $95,000.

Option 1: Since Sam’s AGI is half way in the “phase out”, the amount of credit that is allocated to Sam will be reduced by 50%.  Let’s say the credit is split 50/50 with Sam and Suzy.  Suzy’s return will show her share of the credit – $4,000 and since her AGI is less than $85,000, she’ll get all of the $4,000 credit on her tax return.

When Sam files his tax return, he’ll show his share of the credit ($4,000) credit with an AGI of $85,000.  However, the phase-out calculation will limit the credit on his tax return to only $2,000 ($4,000 times 50%).

In this case, only $6,000 of the $8,000 was available as a refund or to reduce taxes.

Option 2: Suzy could get all of the $8,000 credit.

As you can see, the homebuyer tax credit could be a real boost for the housing industry and the economy – and be a great exercise in sharing the credit and handling relationships!

For more information on this great credit, check out Taking the First-Time Homebuyer Credit.

He wanted to know, “What’s the maximum I can get out of those new tax breaks on my 2009 tax return?”

I thought it was an intriguing question.  Being a CPA, I can figure out tax law and add up the numbers. Here are the results. He can save $13,790 in taxes on his 2009 return!

Now remember, this isn’t for everybody. Here’s Brian’s “ideal” situation. He’s married, has one child in college, and his adjusted gross income (taxable income prior to subtracting exemptions and standard or itemized deductions) is less than $150,000.  And here are the details broken down by credit and deduction.

1) Making Work Pay: This is a new $400 credit ($800 if married and filing jointly) that the taxpayer receives by reduced payroll withholding.  Since Brian will be filing joint for 2009, he’ll be getting $800 tax savings during the year through an increase in each paycheck for 2009.  So that’s $800 savings.

2) First-time Homebuyer’s credit:  Brian and his wife haven’t owned a home in more than 3 years.  Why? When they moved from the Midwest to San Diego, they couldn’t afford a house. Now with the drop in prices, they could buy that new home in 2009. Yeah! Since it’s in San Diego, the price will definitely be more than $80,000. Ka Ching… $8,000 credit. For more details see Taking First-Time Homebuyer Credit.

3) New car sales-tax deduction:  Since car sales are way down and so are car prices, Brian could decide it’s time to buy a new car.  Since he’s always wanted a luxury car, he’d use the excuse that he can get the maximum deduction for sales tax on a car priced up to $49,500.   That‘s a lot of money for a car but he does get a tax savings of $990.  (Price $49,500 times 7.775% (San Diego sales tax) = $3,836 deduction. Since his marginal tax rate is 25%, his tax saving is $990 (3,836 times 25%).   Let’s not talk about what his wife would say about that not so big tax savings for a very big car.

4) Energy saving tax breaks: If Brian’s wife has been complaining about how chilly their family room and master bedrooms are (yes, it does get a tad chilly in San Diego!), now is the time to buy new energy-saving sliding-glass doors for those rooms. If the price of each door is $2,500, which would meet the maximum credit of $1,500 ($5,000 times 30%).

5) Bigger tax break on college costs: Their child is in her 4th year of college and her tuition is $10,000 and wouldn’t have qualified for the Hope credit under old law. Since the old HOPE credit has been extended and expanded (and now called American Opportunity credit), they’ll get the maximum credit of $2,500.

Here’s the summary:

Making Work Pay Credit            $    800

Homebuyer Credit                     $ 8,000

New car deduction- tax savings  $    990

Energy credit (new doors)           $ 1,500

College tuition credit                  $ 2,500

TOTAL                                     $13,790

For details on the new tax act, check out  2009 Stimulus Package: What’s In It For You, and When.

Congress added them as “sweeteners” to help the legislation go down smoothly with disgruntled constituents.

Taxpayers can be forgiven, however, if they don’t seem particularly knowledgeable or grateful about the tax sugarcoating. Most of the changes simply extended existing tax breaks that were about to expire.

These include deductions for teachers and for families with college students, as well as a credit for making energy efficient home improvements.

In this rough-and-tumble economy, this passes as good news: You’ve still got something that you didn’t know you were in danger of losing.

But neither one is likely to get much first aid from the new “First-Time Homebuyer Tax Credit.” The tax credit is a major part of The Housing Assistance Tax Act of 2008, passed on July 30, 2008.

The intent of the credit is no doubt an admirable one: to provide up to $7,500 to help first-time buyers purchase homes.

But look beyond the intent, and the details get dicey.

First of all, unlike other tax credits, which don’t need to be repaid, this one is actually a loan to be paid back over a 15-year period. It’s an interest-free loan to be sure. But sometimes “free” is simply not worth the trouble.

When do most buyers need a loan? At the time they’re buying a home, of course.

Yet this tax credit/loan can’t be tapped until after the home is purchased, sometimes many months later. It must be claimed on a 2008 or 2009 tax return.

That lag time has prompted at least one tax analysis group to suggest that “new financial products will likely be introduced that will advance the funds in anticipation of the refund.”

Such “anticipation” products would likely come with a hefty interest charge. So much for getting an interest-free loan.

This credit could hold some appeal for certain homebuyers – say for someone who barely scrapes up enough money to purchase a home and could use the credit money for an essential repair, like a new roof. Or perhaps it could be used by cash-pinched homebuyers who need furniture or other big-ticket items.

But the question remains: Will it be worth the trouble of dealing with repayment at tax time for 15 years?

For more details on who qualifies and how, read this summary of The First-Time Homebuyer Credit.