Finding out more about the taxes on selling a house
Selling a home is a major life change. No matter what your reason is for selling, selling the place you’ve called home is a big deal. One potentially confusing part of the process is figuring out the taxes on selling a house and how the sale will impact your finances for the years to come.
“Relieved that you won’t have to think about taxes for another year now that you’ve finally submitted your 2017 return or will soon? It’s best not to put taxes on the back burner yet. Instead, take advantage of being in tax mode to make a few moves that can help with next year’s return and improve your finances overall.”
“The average tax refund was $2,895 last year, according to the IRS. Whether you’re looking to use it for travel, invest it or use it to build an emergency fund, there are certain steps you can take to stretch your tax refund dollars.”
Nobody likes to pay more in taxes than they absolutely have to. By the time you start preparing your return, it’s too late to use some of the smartest tactics to control the size of your tax bill. Instead, you have to plan in advance to make sure your refund is as big as possible.
If your return is fairly simple and you’re up for the challenge, preparing your taxes solo could save you a bit of money. In fact, an estimated 33% of Americans file their own taxes each year, so if you’re ready to join their ranks, here are a few tips for getting through the process.
1. Prepare your return early
2. Figure out whether you’ll be itemizing this year
“The new federal tax law created a lot of confusion over whether tax filers may still deduct the interest they pay on their home equity loans and home equity lines of credit.
“The new law suspends the deduction for interest on home equity indebtedness for the next eight years.
“But it turns out the suspension does not apply to all home equity loans (HELs) and lines of credit (HELOCs). It just applies to those that are used to pay for non-home-related things, like paying off your credit card or buying a car. But you can still deduct home equity loan interest that is used to pay for home improvements…”
With just a day before the April 18 deadline to file your taxes, here’s a few last minute tips.
File! Even if you don’t have all the money to pay, it’s much better to file a return than to not file at all. “The penalties for not filing a tax return are 10 times greater than those for filing but not being able to pay taxes due.” (Money.CNN.com. “5 last-minute tax tips you need to know now.” http://money.cnn.com/2017/04/13/pf/taxes/tax-tips/index.html?iid=SF_LN)
You can file for an extension. It’s simple and quick to do on the IRS website, and it will buy you some time. Just be aware that late-payment penalties will be tacked on, beginning after the April 18 deadline.
You can still get professional help. One place to go for help is the VITA program; the “Volunteer Income Tax Assistance program provides specially trained IRS-certified volunteer tax preparers that can help taxpayers with basic income-tax preparation needs.” (Money.CNN.com. “5 last-minute tax tips you need to know now.” http://money.cnn.com/2017/04/13/pf/taxes/tax-tips/index.html?iid=SF_LN)