3 Things Seniors Misunderstand About Taxes

It’s always our goal to provide you with the best information so you can make the best decisions. There are 3 things I’ve noticed seniors are misunderstanding about taxes.

You Don’t Need To Buy Another Home To Avoid Capital Gains Tax

In the old days to avoid paying Capital Gains tax when you sold a home you needed to use your profit to buy another home. That’s no longer true.

The IRS code allows you to avoid paying tax on up to $500,000 per couple ($250,000 per person) if you have lived in the home for 2 of the previous 5 years. That means if a couple bought a home for $400,000 and sell it for $900,000 you wouldn’t owe any tax.

The best part is you don’t need to buy another home to take advantage of this loophole. For more information Google “IRS 2 in 5 exemption” and you can pull up a page on the IRS website about selling your home.

It Is Possible To Defer Property Taxes

Hopefully the new tax relief has given you a much lower school tax payment. But, if you are a Senior with an Over 65 Exemption and having trouble making your property tax payment you should know that it is possible to defer or postpone your property tax payment for as long as you live in the home.

It is important to note that this deferral only postpones your taxes and does not cancel them. It also accrues 5% interest annually until the deferral is removed. When the property is sold or the ownership is transferred to the estate/heirs, the taxes and accrued interest become payable.

Contact the public services department at the Williamson County Appraisal District for more information.

You Can Transfer Your Over 65 School Tax Freeze Percentage

Many Seniors tell me they want to downsize and what’s stopping them is they think if they downsize their school taxes for a smaller home will wind up higher than what they are currently paying because they have an Over 65 Exemption.

If that’s you it’s important to know you can transfer the percentage of school taxes you are paying to a new property.

For example, because you have an Over 65 Exemption you may only be paying 25% of the school taxes you would normally pay without an exemption. When you buy another property and transfer the Over 65 Exemption you will pay 25% of the school taxes you normally would pay for the new property.

I’m doing the quick math with this example. To get the to the penny calculation for your new property you will want to contact the tax office in the county where that home is located.

I hope clearing up some of these misunderstandings helps you figure out your plans. If your plans include making a move contact us so we can help you put a good strategy together this year.

If you plan to sell in 2024, now is the best time to attend our Free Home Selling Workshops. Contact us if you want to attend a workshop, and we will notify you when they are scheduled. As always, you can check KopaWorkshop.com to see the dates and times of our in-person and online Free Home Selling Workshops. For years, home sellers have told me they benefited from attending our events. Sign up at KopaSeminar.com.