You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:

1. Close on your home purchase by November 30, 2009,
2. Ensure that you are a qualified first-time buyer under IRS guidelines,
3. Decide which year to file under, 2008 or 2009,
4. File an amended 2008 return or choose to apply the credit to your 2009 tax return.

If you want the benefits of your credit as soon as possible: 

You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return. 

If you anticipate a drop in income next year: 

You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

 Your Next Steps

Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:

1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.

Regardless of whether you're applying the first-time home buyer tax credit on your 2008 return or your 2009 return, you'll need to visit the IRS Web site and download Form 5405 (PDF 257KB) . This form has just six lines and takes only a minute to complete. 

1. On the first line enter either $8,000 or 10 percent of the home purchase price, whichever is smaller. 
   
   Since the national median home price is around $175,200 (March 2009), in most cases the $8,000 will be the smaller of the two. In order for 10 percent of the home price to be smaller, the home purchase price would have to be $79,999 or less. 
   
   
2. On the second line enter your adjusted gross income. 
   
   You will find your gross adjusted income on line 37 of Form 1040, which you submitted when you filed your 2008 return. The tax credit form actually requires you to note your modified adjusted gross income, but that affects few people, so most will just use their adjusted gross income.
   
   
3. If your adjusted gross income is more than $75,000 (individual) or your income is more than $150,000 (joint)  you'll have to complete some additional calculations to determine the credit amount for which you qualify.
   
   Everyone else will simply enter the tax credit amount on Line 6.