When it comes time to sell your house in Fort Worth, you need to be prepared for the many hidden costs, including realtor commissions, sales fees, and repairs. But did you know you can recover a significant amount of lost money once tax season rolls around? If you’re not familiar with the write-offs, don’t worry, we’ve got you covered. Don’t miss out on these six tax deductions when selling your home.
1. Housing Repairs and Renovations
That’s right, you can get a return on all your pre-sale home repair expenses, including everything from labor to tools. However, there’s a cutoff date. The IRS wants to ensure you actually spent the money to enhance your property sale, and not to enjoy the fresh remodel for yourself. So in order to cash in on the deduction, the charges must have been made within 90 days of the closing date.
2. Property Taxes
You’re also entitled to property tax deductions when selling your home. Regardless of whether you owned your household for one or ten months of that year, the government will reimburse you up to $10,000.
3. Mortgage Interest
In addition to your property taxes, you can also deduct your mortgage interest for the period of time that you owned your home the past year. There have been several changes made recently, however, so keep in mind that as of 2020 you can only write off $12,400 as an individual, $18,650 as a head of household, and $24,800 as a married couple.
4. Selling Fees
You can earn back a ton of cash by including selling costs in your tax deductions when selling your home in Fort Worth. The only requirement is that you must have resided in the home for two of the past five years. It doesn’t necessarily have to have been consecutively, either- you’re allowed to have switched primary residences back and forth, as long as you total two years. Some write-offs you can include in your returns are:
5. Capital Gains Exclusions
This hack is not a deduction but an exclusion, and it will save you a ton of money. Again, this can only be exercised if the home was your primary residence for two of the past five years. Capital gains are what you ultimately profit from in your house sale, after you subtract all the taxes, fees, and leftover mortgage. You can avoid paying taxes for up to $250,000 of your capital gains if you’re single and up to $500,000 if you’re a married couple.
If you haven’t owned and lived in the residence for two out of the last five years, don’t automatically exclude yourself- you may be eligible for a partial exclusion.
6. Moving Expenses for the Military
This only applies to active-duty military members. If you’re able to capitalize on this tax deductions when selling your home in Fort Worth and relocating, you shouldn’t pass it up.
Ultimately, it’s best to consult a tax specialist who knows how to navigate the system and can cater your return to your individual circumstances. Now that you know what to look out for, you should keep track of all your expenses along the way. It’ll make tax day all the more easy!