Tax season has finally come to a close. This means that people across the country either have or soon will, receive their tax refund.
It’s a no-brainer that after all of that time and energy spent filling out documents, uncovering statements, or whatever else your tax-season process entails, you’re likely ready to bid any tax-related sentiments adieu!
However, if you have recently sold your home or plan on selling it in the next few months, then don’t let go just yet. Houses are very valuable pieces of property, and there are several tax write-offs for sellers to keep in mind these upcoming months before the beginning of tax season is upon our heels yet again.
Selling your home is a transaction, and whenever a transaction exists, taxes are likely to surround it to some degree. There are several tax write-offs to look out for that you can use when filing.
Real estate agents
If you hired a real estate agent to help you sell your house, and they made commission off of the sale, then you can write off the commission on your return.
Remodeled the kitchen? Added in new hardwood floors? That investment wasn’t for nothing. You can write off home improvement expenses while filing your taxes as long as they weren’t necessary.
Home fixes that are made so that the house can remain a livable and safe space aren’t qualified as write-offs because they are essential. However, home improvement projects that were made to improve the aesthetic and value of the house are good to go!
Costs associated with selling
A fair amount of costs associated with selling the house including inspections, closing, and marketing can count as a write off. If you’re not sure if it counts, be sure to consult a financial advisor who can assist you with determining what does and what does not qualify.
If you plan on selling your home in the next several months, pay attention to whether or not you’re located in one of the many real estate markets to watch. That way you can both strategize on if it’s a good time to sell your home and what tax write offs you can plan on using.
Pay attention to exemptions
There is a huge exemption in place that almost guarantees that if you sell your home close to market average, which is about $200,000, then you’re likely excluded from paying taxes on the home’s sale. If you’re filing as single, then you aren’t required to pay taxes on the first $250,000 of the sale.
If you’re filing jointly, then you don’t have to pay taxes on the first $500,000. Some rules apply including you must have lived in the house for at least two full years and you can’t have used this tax exclusion within the last two years. However, you can still save on exemptions if you don’t meet the criteria.
Just be sure to understand all of the tax write offs for sellers available!