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Tax Saving
Finally, you've gathered the means and courage to sell your
home. Is there any way you can start saving the little money
that you have left?
They Taxpayer Relief Act of 1997 is your answer. The Act set
exclusions from federal tax of up to $500,000 capital gain when
a couple sells their main home (%250,000 for single filers).
The exclusion can be reused every two years. The catch? You
must own and occupy the home for two years before claiming the
tax break.
As a result of this act, investing money in home repairs can
also bring you a considerable amount of tax relief. If you sell
your home at a profit, home improvement expenses will reduce
the capitals tax that you would owe. Of course, this is the
law NOW. The tax code changes quickly. Because of this, it is
a good idea to keep all of your invoices and cancelled checks
for home improvements. This will allow you to methodically track
your home improvement expenses and tailor them to the tax code
as necessary.
The current tax code also allows for yearly deductions in property
taxes and mortgage interest. These tax breaks can really help
you save for the money you'll need to make your monthly mortgage
payments!
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