2024 Tax Season: Don’t Forget to File and Factor In Your Home Transactions!

As the 2024 tax season approaches, residents of the Portland Metro area are reminded of the importance of timely tax filing and the potential implications of recent real estate transactions on their tax situation. The deadline for filing your 2024 taxes is April 15, 2025. It’s crucial to mark this date on your calendar to avoid any late penalties or fees. This blog post serves as a reminder and guide for those navigating the complexities of tax season, especially after buying or selling a home. Please note, while this post provides general information, I am not a tax professional. Always consult with a local tax advisor for personalized advice.

Understanding the Impact of Real Estate Transactions

If You’ve Sold a Home:

1. Capital Gains Tax: If you’ve sold your home, you might be subject to capital gains tax if the profit exceeds IRS thresholds. However, there are exclusions available for those who meet certain criteria, such as having lived in the home for at least two of the last five years.
2. Deductible Expenses: Remember, certain selling costs like real estate agent commissions, legal fees, and home improvement expenses may reduce your capital gains.

If You’ve Bought a Home:

1. Mortgage Interest Deduction: Homeowners can often deduct mortgage interest on their tax returns, which can significantly reduce taxable income.
2. Property Tax Deduction: You might also be eligible to deduct property taxes paid on your new home up to a certain limit.
3. Home Office Deduction: If you use part of your new home exclusively for business, you may qualify for a home office deduction.

Organizing Your Documents

Whether you’ve bought or sold a home, proper documentation is key. Gather all relevant paperwork, including closing statements, property tax records, home improvement receipts, and mortgage interest statements. Having these documents organized will make the tax filing process smoother and ensure you’re prepared for any deductions or credits.

Seeking Professional Help

Real estate transactions can significantly impact your tax situation, often complicating the filing process. It’s highly recommended to consult with a local tax professional who understands the specific laws and regulations of the Portland Metro area. They can provide tailored advice and help you maximize your return or minimize liability.

Conclusion

As we move through 2024, don’t let the tax season catch you off guard. Remember the April 15, 2025, deadline, and understand how your recent home sale or purchase might affect your taxes. Organize your documents early, and don’t hesitate to seek professional advice to navigate the complexities of real estate and taxes. By preparing now, you can ensure a smoother, more efficient tax filing process.