Do you sell your house? These tax tips are for you
Your earnings may not be taxed
Did you know that if you sell your house and get profits, they cannot be taxed? This is only key tax information you should know. Here are 10 things you should keep in mind if you plan to sell your home this year.
If you have a Capital gain on the sale of your home, you may be able to exclude your income taxes. This rule applies if you were the owner and you used as your principal residence for at least two of the five years preceding the date of sale.
There are exceptions and rules for use of property. Some exceptions and usage rules apply to people with disabilities. Other applies to certain military government and certain employees of the Peace Corps or Peace Corps. For more details see the Publication 523, Selling Your Home.
Most of the gain that can be excluded is $ 250,000. The limit is $ 500,000 for joint returns. The Tax on Net Investment does not apply to the excluded gain.
If the gain is not taxable, it is not necessary to report the sale to the IRS on your tax return.
The sale must be reported on your tax return if you cannot exclude all or part of the gain. And you must report the sale if you decide not claim the exclusion. This also applies if you get a Form 1099-S, “Proceeds From Real Estate Transactions”. If you report the sale you should check the questions and answers about the tax net investment on IRS.gov.
Generally, you can exclude the gain from the sale of your main home only once every two years.
If you own more than one home, you can only exclude the gain on the sale of your main home. Your primary residence is usually the house in which you live most of the time.
If you claimed credit for home buyers first time when you bought the house, there are special rules for sale. For more information about these rules see Publication 523.
If you sell your main home at a loss is not deductible.
After selling your house and move out, be sure to give your new address to the IRS. You can send the IRS a Form 8822, Change of Address to do this.
Important Note on Tax Credit Insurance Premium
If you receive the prepayment premium Tax Credit in 2014, it is important that reports the changes, such as changes in your income or the size of your family, your health insurance market. You must also notify the market when you move outside the coverage area of your plan on the market today.
Prepayments of tax credit insurance premium provided financial assistance to help pay for insurance purchase through the Health Insurance Market. Report changes will help you get the type and amount of financial assistance so you can avoid taking too much or too little in advance.
If you still have to do your taxes for 2013, use e-file IRS to prepare and file your tax return. The tax software will do almost all the work for you. You can use IRS e-file until October 15th.If you file a paper return, you can use the worksheet in Publication 523 for help.
For more information on selling a home looks Publication 523 at IRS.gov. You can call 800-TAX-FORM (800-829-3676) to get it by mail.