This post originally appeared on Trulia.
If you’re like me, you think the IRS wants as much information about your financial life as possible. And that’s typically true—except when you sell a home and make a profit of less than $250,000 (or less than $500,000 when you file a joint return with your spouse).
If you meet those qualifications, and if you have lived in that home for two of the five years before you sell, the IRS doesn’t want to hear about your home sale because the profit you make is excluded from being taxed under U.S. Code 121. Tell your mom about the sale instead, because the IRS isn’t listening.
And now for the deductions …
As if that wasn’t enough, here’s some more good news you should know about: The IRS grants some tax deductions for home sellers. Getting the deductions requires that you itemize your taxes, admittedly a tedious job, but one that is probably worth your while. Here are five tax deductions you should take for 2014.
1. Selling Costs
If you don’t qualify for the 121 exclusion, you will owe taxes on any profit, so make sure you deduct all your selling costs from your gain.
You can deduct the following, according to Nolo:
- Your real estate agent’s commission
- Legal fees
- Title insurance
- Inspection fees
- Advertising costs
- Escrow fees
- Legal fees
And there’s another consideration. Vanessa Borges, an enrolled agent and tax preparation supervisor with the Tax Defense Network, notes that “you might qualify for a partial exclusion if you sell your home due to circumstances involving divorce, change in employment, change in health, or other unforeseen circumstances.”
2. Moving Deduction
If you have to sell your house because you’re relocating for work, you might be able to deduct some of your moving expenses, says Chantay Bridges, a licensed senior real estate agent in Los Angeles. Deductions could include transportation costs, travel to the new place, storage costs, and lodging costs.