If you've been living in your house for the last two years and it's only your personal residence (no business use claimed on any tax returns) you can profit up to $250,000 on the sale and still not owe any taxes. If you're married filing jointly, you can profit up to $500,000 without paying any taxes.
If you've lived in your home less than two years and sell it for a profit, you still may not owe any taxes. It will depend on how long you lived there and your reason for selling.
If you've had a home office or used part of the house for rental or other business purposes, you will probably have to report a gain on that portion of the sale and pay taxes on it. But fear not, the portion of the house that was strictly for your personal living purposes will still qualify for an exclusion of profits from your tax returns.
All the details about the tax impact of selling your home can be found in IRS Publication 523.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
Tax Tips: Do I pay taxes when I sell my house?