Homebuyer Tax Credit Bills Coming Due in 2011

homebuyer tax credit
homebuyer tax credit

If you took advantage of the first time homebuyer tax credit in 2008, it's time to start repaying this interest -ree loan when you file your 2010 tax return by April 2011. But, if you used the homebuyer tax credits in 2009 or 2010, you won't ever have to repay the money unless you sell or otherwise dispose of your home during the first 36 months you own that home.

That's right: Only first-time homebuyers who used the tax credit in 2008 have to start repaying their tax credits. You'll have to repay the money over a 15-year payment when you file your tax returns starting with your 2010 return and continuing until 2024.

How do you figure out how much to pay? It's a rather simple formula: Divide the amount of the tax credit you claimed by 15 and add that amount to your tax bill. For example, if you claimed a $7,500 tax credit divide that by 15 and you get $500. That's how much you'll need to pay each year. You'll need to file Form 5405, "First-Time Homebuyer Credit and Repayment of the Credit," each year you repay the money.