First the tax credit is a refundable credit that if you qualify, you will receive over and above your normal tax refund. So it is not based on your other deductions, since it is not an income tax deduction.
Next the credit is based on 10% of the purchase price on the home up to $8000. So if you purchased for $70,000, the credit would be $7000 and if you purchased for $100,000, the credit would be $8000. There are income limitations associated with the credit, so this could be a reason to either claim the credit with the 2008 or 2009 income tax return. If your income in either year is too much to be able to receive the complete credit, you are able to decide with year to take the credit on.
If you decide to claim the credit on your 2008 income tax return, you are able to take your information to an experienced tax professional to help you prepare the amended tax return, form 1040X.
I have attached a link below to the form 5405, First Time Home Buyers Credit, so you can check to see if you meet all the requirements to claim the credit.
Laura H – H&R Block – Senior Tax Advisor 5
**This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.