Selling a home can be complicated, but what’s more complicated is doing your taxes. After you sell a home this year, you may have to do capital gain taxes, property taxes, and more. Depending on your level of profits from the home, your amount of taxes can vary– but there are several crucial documents that you’ll want to keep on hand during this process. Here are the most important things you need while doing your taxes after you sell a home.
1099-S Forms
1099-S forms, despite their undescriptive name, are crucial when you’ve just sold a home. These tax forms describe how much capital you’ve gained from the sale, which is to say, how much profit you’ve made off the sale. You should receive one of these while you’re dealing with closing documents for the sale– if you didn’t receive one, you didn’t make enough money for it to be taxable!
Your Closing Statement
When you receive a closing statement for your home sale, you’re basically just receiving a list of all the expenses that someone had to pay during the sale. It’s a little like the receipt for selling your home. Closing statements include information about property taxes and brokerage payments, which means that you want to keep it close by as you file your taxes this year.
Proving Your Primary Residence
If you have documents that can prove your home was your primary residence, keep them around! The section 121 tax exclusion states that you don’t have to pay capital gains tax on a home that was your primary residence for at least two out of the last five years– which is useful when you turn around and file your taxes in April. Documents that prove your primary residence can include utility bills, voter registration, or even previous tax returns.
Making Sure You’ve Got Your Paperwork
Tax season can be hard, but it gets harder if you don’t have the necessary documents. Make sure to keep your closing statement, your utility bills, and any 1099-S forms you may have received during the sale to ensure that you can properly fill out your taxes this season. These crucial documents can mean the difference for your tax-filing process this season, so make sure to keep them close as your home sale wraps up.
Hoping to make your home sale easier? Contact us. We buy homes fast for cash each day, and we can help you understand your necessary documentation, too. If you’re ready to sell your home fast for cash, we can help. We buy homes for cash in Modesto, Sacramento, and beyond, even if you’re struggling to understand the tax implications. Give us a call, and we could help you sell your home fast for cash in just under two weeks.