I just bought a home 3 months ago, can I pay it off now and not pay a bunch in taxes?

[edward-barr]

I sold my old home after I bo8ught the new one, the money I made will allow me to pay if off.

[VolvoGirl]

That might not make a difference in your taxes.   You will just have less mortgage interest that you can deduct if you itemized deductions.  But most people don't have enough itemized deductions and take the Standard Deduction.   You will still have property taxes  you can deduct if you itemize.  

[edward-barr]

Thank you!  I thought that was the case but wanted to be sure.  Thank you for the help!

[fanfare]

Figure the capital gains tax you will have to pay on your home sale before  you use that to pay down your mortgage.

@edward-barr 

[xmasbaby0]

@edward-barr You have not provided any information here regarding the sale of the "old" home except to tell us that you sold it.   We do not know if you are subject to capital gains tax on that sale, since we do not know how long you lived in that home or what your filing status will be.

SALE OF HOUSE

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

• If you are using online TT, you need Premium software to report the 1099-S

NOTE:   If you have ever used the home as rental property or claimed a home office, you have more information to enter

Paying off the mortgage on the "new" home will not be a taxable event.   

[Opus 17]

Whatever tax you owe on the sale of the old home is not affected by anything you do after, including buying a new home.  There was a rule about that but it was eliminated in 1997.

Generally, when you sell your main home that you have owned and lived in for at least 2 years, you can exclude the first $250,000 of capital gains from your income ($500,000 if married filing jointly).  Gain over that is taxable, and if your gain is that large, you should make an estimated tax payment as soon as possible -- if you overpay the estimate, you'll get the difference back in your refund, but if you underpay the estimate, you may owe a penalty.

The rules for excluding the gain are here.

https://www.irs.gov/forms-pubs/about-publication-523

[Mike9241]

using the sales proceeds from the old home to pay off the mortgage on your new home will not save you any taxes on the taxable portion of the gain from the sale. all that will happen is your mortgage interest deduction would be reduced. 

if your home acquisition indebtedness exceeds the maximum paying down the mortgage will result in less interest that is not deductible.

There is not enough info to provide more advice. This forum is not for providing financial advice outside of income taxes.   A financial advisor that can look at your whole financial picture would be able to offer the best advice. There are factors besides saving taxes.