End-of-Year Tax Strategies for Home Sellers

As the year comes to a close, it’s the perfect time for homeowners planning to sell to consider tax strategies that can maximize their financial benefits. Whether you’ve already sold your home in 2024 or are preparing to list it, understanding these tips can help you save money and make the most of your investment.

Key Tax Tips for Home Sellers

1. Take Advantage of the Home Sale Exclusion If you’ve lived in your home for at least two of the last five years, you may qualify for the home sale exclusion. This allows you to exclude up to $250,000 (or $500,000 for married couples) of profit from capital gains taxes. Ensure you meet the residency and ownership requirements to benefit.

2. Track Selling Expenses Many costs associated with selling your home can be deducted from your taxable gain. This includes real estate agent commissions, advertising costs, staging expenses, and legal fees. Keep detailed records to maximize deductions.

3. Consider Capital Improvements Investments you’ve made to improve your home—such as renovations, energy-efficient upgrades, or new appliances—can increase your cost basis and lower your taxable profit. Be sure to document these improvements thoroughly.

4. Understand State and Local Taxes Selling property in New York City comes with unique state and local tax implications. The NYC transfer tax and the mansion tax for properties over $1 million are two considerations sellers should be aware of. Consulting a tax professional can help you navigate these specificities.

5. Offset Gains with Losses If you’ve experienced losses in other investments, you may be able to use these to offset capital gains from your home sale. Discuss your portfolio with a financial advisor to explore this option.

6. Plan for Estimated Taxes If you’re expecting a significant taxable gain, consider making estimated tax payments to avoid penalties. A tax advisor can help you calculate the appropriate amount.

Year-End Planning for Future Sellers

Even if you’re not selling until next year, you can start planning now to set yourself up for success:

• Organize records of home improvements and selling expenses.

• Consult a tax advisor to understand potential implications and deductions.

• Explore strategies to minimize taxes if you’re considering a 1031 exchange for investment properties.

Schedule Your Tax Planning Consultation

Navigating taxes during a home sale can be complex, but you don’t have to do it alone. A personalized consultation can help you identify opportunities to save and ensure compliance with all applicable regulations.

Take the next step today: Schedule your year-end tax planning consultation by visiting www.mikehomesweethomes.com.

Final Thoughts

Selling your home is a major financial decision, and thoughtful tax planning can help you retain more of your hard-earned profit. Whether you’ve sold this year or are preparing for the next, staying informed and proactive will ensure your success.

#SellWithSuccess #HomeSellers #TaxTips