Tax Tips: Make your home work for you

Few people look forward to the beginning of tax season. However, like it or not, we are faced with it every year. When you next meet with your tax advisor, be sure to ask about the tax benefits of home ownership.

There are numerous federal and state tax policies and programs designed to encourage homeownership by providing tax relief. For full details on these programs you will want to speak with a tax advisor; however I have included some ideas in order to get you asking the right questions.

Sellers - The Taxpayer Relief Act of 1997 allows couples who sell their home to keep up to $500,000 in profits tax-free and let's single filers keep up to $250,000. In order to qualify for this break the home must have been the filer's primary residence for two of the past five years.

Buyers and Sellers - If you meet certain qualifications you could deduct direct moving costs from your income tax. In order to be eligible you must have changed job locations and your new job site to be at least 50 miles further from your old home than was your old job location. Also, you must have worked full time for at least 39 weeks of the 52 weeks after the move.

For more information on how your home can save you money you should speak to your accountant or let me know and I will point you to a source for more information.

Source:  Prudential eNewsletter