You've found a charming bungalow in a nice neighborhood at a price you can afford. Mortgage rates have never been lower. You've even managed to come up with a 20% down payment. There's just one problem: The Pepto Bismol-colored carpet in the family room is not to your taste, and you don't have any money left for hardwood floors.

Well, you may not have to live with that hot-pink rug for long. A provision in the economic stimulus bill enacted this year provides a tax credit of up to $8,000 for first-time home buyers. Unlike the $7,500 tax credit enacted last year, this credit doesn't have to be repaid. And you don't have to wait until you file your 2009 tax return to get your money.

The tax credit is available for first-time home buyers who purchase a home before Dec. 1. You can claim the credit on your 2008 or 2009 tax return, according to the IRS. However, you can't claim the credit until after you've purchased your home. Home buyers who want to claim the credit on their 2008 tax return have these options:

File for an extension

This will give you until Oct. 15 to file your tax return. Once you close on your home, you can file your taxes and claim the credit. Taxpayers who file their taxes after receiving an extension can still file electronically, the IRS says. By e-filing and arranging deposit, you can get your refund in as few as 10 days.

To request an extension, file Form 4868 by April 15. Most tax software programs will help you file an extension. If your 2008 adjusted gross income is $56,000 or less, you can file an extension using Free File, a partnership between the IRS and tax software companies. You can find more information at www.irs.gov.

Remember, though, that if you owe money to the IRS, filing for an extension doesn't give you more time to pay.

File now and amend later

Suppose you're due a large refund and don't want to wait to get your money. You can file your 2008 tax return, pocket your refund and file an amended return after you close on your home.

Likewise, taxpayers who have already filed can amend their returns to claim the home buyer's credit after they close on a home. Use Form 1040X to file an amended return.

Other features of the home buyer's credit:

•You may be eligible, even if this isn't your first home.

First-time home buyer' is kind of a misnomer," says Jonathan.  If you haven't owned a principal residence in the past three years, you are considered a first-time home buyer.

If you're married and your spouse has owned a home in the past three years, you don't qualify for the credit.

•The tax credit is refundable. Suppose you owed $1,000 in 2008. If you qualify full credit, you'll receive a refund for $7,000. This makes the credit particularly valuable for low-income families who owe little or no federal income tax.

•Bargain hunters may get a smaller credit. That foreclosure fixer-upper you're considering may be a real steal at $40,000, but you won't get the full tax credit. The credit is worth 10% of the home's purchase price, up to a maximum of $8,000. So your $40,000 home will result in a $4,000 credit.

•Married couples who file separately will be eligible for a maximum credit of $4,000 each. Unmarried partners who purchase a home together can split the credit, or one partner can claim the entire credit, says Amy McAnarney, executive director of H&R Block's Tax Institute. However, the couple can't claim more than the maximum credit allowed for the home, she says.

•Single taxpayers with modified adjusted gross income of more than $95,000 are ineligible for the credit; for married couples, the cutoff is $170,000. Singles who earn $75,000 to $95,000 and couples with AGI of $150,000 to $170,000 are eligible for a reduced credit.

Home buyers who expect their AGI to drop this year may be better off waiting for their 2009 tax returns to claim the credit, because they could be eligible for a larger amount, McAnarney says.

•If you bought a home in 2008, you're not eligible for the new tax credit. If you purchased your home between April 9, 2008, and Jan. 1, 2009, you can still claim a $7,500 credit, but that credit must be repaid in installments over 15 years.

While these are guidelines available on the gov.irs.com website, always check with your financial advisor or accountant to clarify the tax treatment for your personal situation.

Whether buying or selling, Jonathan Bagg can be reached at 904.599.2028 and www.beachbagg.com to assist you with your real estate needs.