10 Things to Know About Living in Las Vegas
Living in Las Vegas is quite different than just visiting the Strip.
The post 10 Things to Know About Living in Las Vegas appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Living in Las Vegas is quite different than just visiting the Strip.
The post 10 Things to Know About Living in Las Vegas appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
From Oktoberfest to the Salzburg Summer Festival, Austria seems to have festivities year-round. This German-speaking nation of some 9 million has a rich cultural heritage and can boast of such fabled composers as Wolfgang Amadeus Mozart and Ludwig van Beethoven, … Continue reading →
The post How to Retire in Austria: Costs, Visas and More appeared first on SmartAsset Blog.
No matter your age, there are steps to take to ensure retirement bliss is in your future.
The post From Your 20s Through Your 60s: Retirement Savings Mistakes to Avoid appeared first on Discover Bank – Banking Topics Blog.
If you’re tired of having mortgage debt, refinancing from a 30-year loan to a 15-year loan will allow you to pay it off faster. On top of that, you’d also pay less in interest, as shorter loans come with better rates. Refinancing … Continue reading →
The post 3 Questions for Anyone Refinancing to a 15-Year Mortgage appeared first on SmartAsset Blog.
Spring is an often-busy time for home buyers and sellers who want to make deals and moves when it’s warm outside and the school year is coming to a close. But selling a primary home or an investment property comes loaded with tax consequences.
I interviewed Collier Swecker about key tax considerations home sellers should know to pay less. He’s a founding partner of the Mega Agent real estate team at RE/MAX Advantage, recognized as RE/MAX's #1 selling team in the Birmingham, Alabama market.
Collier is a distinguished HomeLight agent, awarded for ranking in the top 1% of all agents in his area. He leads one of the most technologically advanced and forward-thinking real estate teams in Alabama.
But on top of all those accolades, Collier graduated from Auburn University with a law degree and Washington University School of Law in St. Louis with a Master of Law in Taxation. He was the principal partner in Swecker and Sparks, a law practice in Auburn, Alabama, for three years. He left the practice in 2006 to pursue a new career in real estate development and sales.
Click on the audio player above to listen to the interview. Here are some of the real estate and tax topics we cover:
[Listen to the interview using the embedded audio player or on Apple Podcasts, Stitcher, and Spotify]
Use these tips from HomeLight’s Corinne Rivera to avoid expensive tax mistakes when selling a home:
Give yourself a pat on the back—you sold your home! Your sale profit is sitting pretty in your bank account, but with Tax Day quickly approaching, will the IRS take a chunk of your proceeds?
“The majority of America does not need to worry about that,” says Collier Swecker, a Jefferson County, Alabama real estate agent who ranks in the top 1% of agents in his area.
That’s good news, but to make sure you’re in the clear and that you file a tidy tax return, ask yourself these questions relevant to home sellers during tax season:
If you sold your home in 2018, these are the documents you’ll need when you file your taxes.
If you’re a single tax filer and your adjusted capital gain on your home sale is $250,000 or less, you qualify for the capital gains tax exclusion. Married filers can exclude gains up to $500,000. The IRS considers profits in excess of these amounts to be taxable income.
“The biggest thing is to make sure that the homeowner has lived in the house two out of the last five years to qualify for that exemption,” says Swecker.
For example, if you’re a single taxpayer who’s lived in your home for five years, and your capital gains from the sale were $300,000, you must pay taxes on $50,000 of that profit. But, if your capital gains were $100,000, you’re in the clear!
To calculate the capital gain from your home sale, you’ll need to calculate your adjusted cost basis for the house. Here’s how to break down the numbers:
The number left over is your adjusted cost basis, or how much your home actually cost you. Next, here’s how to figure your capital gain.
The remaining amount is your adjusted capital gain, which is the profit you made on the sale.
You can use capital improvement costs to increase your cost basis, which in turn reduces your capital gain. A lower capital gain means less tax liability.
But the cost of “improvements” doesn’t include routine repairs and maintenance costs. The only improvement costs you can include are those that increased your home’s market value.
“In my own house recently, I had a problem with a window, but I decided that all of them should get replaced,” Swecker says. “Now, that would be an improvement to the house because I went from single pane wood windows to double pane energy-efficient windows.”
But Swecker reiterates that the specific improvements added to your cost basis really only matter if you have to pay capital gains tax.
To qualify for the capital gains exclusion, you’ll need to meet the criteria of a three-pronged test:
If any don’t apply or if your capital gains exceed the amount you can exclude, you must pay the capital gains tax.
Short-term capital gains apply if you’ve owned your house for less than a year before selling it. If your home sale gives you a short-term capital gain, it’ll be taxed at your federal income tax rate.
If you’ve owned your home for longer than a year when selling, you’d be subject to long-term capital gains, which is generally lower than ordinary income tax rates.
Review HomeLight’s comprehensive capital gains tax bracket breakdown to see where you land and find your rate.
See? Taxes on your home sale aren’t that scary. When in doubt, talk to a tax advisor to save the most money this tax season.
Corinne Rivera is a content writer at HomeLight. She writes about every step of the real estate process, from paint colors that add value, to the terms of closing documents, and everything in between. When she’s not creating real estate content, you can find her exploring open houses, watching HGTV, or redesigning her apartment…again.
To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on Apple Podcasts or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. The show is also on the Spotify mobile app! Click here to sign up for the free Money Girl Newsletter!
House on wooden background image courtesy of Shutterstock.
According to the U.S. Department of Transportation, as of 2012 there were at least 8.4 million registered motorcycles in the United States (a number that has likely risen in the past four years as the economy has strengthened and auto … Continue reading →
The post The Best Cities for Motorcycle Owners appeared first on SmartAsset Blog.
Weâre not going to lieâ2020 was a tough year for everyone. Between COVID-19 and pandemic-driven layoffs, weâre all ready to move on from last year. So, what are your new yearâs credit resolutions for 2021? Do you want to improve your credit score, pay your bills on time or create a savings plan? If you havenât thought… Read More
The post 7 Solid New Yearâs Credit Resolutions for a Happier 2021 appeared first on Credit.com.
Is taking money from your 401(k) plan a good idea? Generally speaking, the common advice for raiding your 401(k) is to only take this step if you absolutely have to. After all, your retirement funds are meant to grow and flourish until you reach retirement age and actually need them. If you take money from […]
The post Should I Take Money Out of My 401(k) Now? appeared first on Good Financial Cents®.
It’s not all bad news for savers in a lower interest rate environment. Here’s why.*
The post How Should I Save If the Fed Cuts Rates? appeared first on Discover Bank – Banking Topics Blog.