Article Advise

submitted: Aug 27th 2008 | by: TonyKnapp | Total views: 2 | Word Count: 442 | |

Most only think they get the tax break when they first purchase their home and they don't realize that their home can save them money at tax time when they sell it as well. So read on the learn the impact that your home can have on your taxes.

Are you planning or wanting to sell your home soon? Putting your house on the market and selling it can add money to your bank account while reducing your tax bill greatly. Selling your home is a great investment.

When you sell your house to make a profit, the first $250,000 can be taken away during tax season. Even better, if you are married and you file together with your husband or wife, the amount of money doubles. This a great gain for anyone!

However, there are a few requirements that come along with this tax break. You have to have lived in your residence for two years out of five years in order to receive this tax break. This gain can only be taken advantage of every two years which is good because not many people move every two years.

Reasons such as job relocation may cause someone to have to sell their home before they have lived in it for 2 years. Job relocation can be due from your employer moving you or even you applying for a new position with another company.

Another reason why people do not always stay in their homes for two years is because of health problems. This is an acceptable reason by the IRS will want to know why they should be substantiated by a doctor in order for you to receive your tax break.

Other reason people end up selling their home is due to a natural disaster. If this happens there are guidelines, set out by the IRS where you will be able to claim this exemption on your taxes. There are a number of natural or other disasters that qualify in this area; divorce, death, war, terrorist attacks, multiple births or separation form spouse.

All of these reasons can benefit you when dealing with taxes and exclusion. If you need or want to know how much money you can deduct during tax season, simply divide the number of months you have lived in your home by 24. Then take the number you get, multiple it by the full exclusion, and you then have your gain that you can deduct when filing taxes.

Anyone who chooses to sell their home can lower their taxable income when it comes the time to file for tax returns. To get to know more about taxes, exclusion, and selling your home, visit the IRS website.

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