The real estate market was a major economic drag, so lawmakers decided to jump-start it by offering first-time homebuyers a tax break. It seemed to work, so as 2009 wound down, Congress extended the first-time homebuyer credit and expanded it to folks looking to purchase move-up homes.

First-timers — individuals who haven’t owned a residence in the last three years — can claim up to $8,000. Current homeowners who’ve lived in their residence for five of the eight years before buying can get up to $6,500.

You must have a contract in place by April 30, 2010, and the deal closed by June 30 to qualify for the credit.

Even if your residential purchase is in 2010, you have the option to take the credit on your 2009 tax return or wait and claim it on your 2010 Form 1040. Run the numbers both ways to see which filing year will save you the most tax money.

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