Tax Tips for Homeowners: Don’t Miss These Deductions!
Owning a home isn’t just about having a place to call your own—it also comes with some sweet tax perks. With tax season happening now, make sure you’re not leaving money on the table! Here are some key homeowner tax deductions and credits you should ask your tax professional about.
1. Mortgage Interest Deduction
One of the biggest tax breaks for homeowners is the mortgage interest deduction. If you have a mortgage on your primary or secondary home, you may be able to deduct the interest you paid throughout the year (up to a certain limit). Make sure to check your Form 1098 from your lender to see how much you paid in interest.
2. Property Tax Deduction
Your property taxes might be a big expense, but the good news is they could be deductible! Homeowners can deduct up to $10,000 ($5,000 if married filing separately) in state and local property taxes. Keep those tax bills handy when filing!
3. Mortgage Points Deduction
If you paid points to get a lower mortgage interest rate, you may be able to deduct those costs on your taxes. Whether you can deduct them all at once or over the life of the loan depends on your specific situation, so double-check with a tax professional.
4. Home Office Deduction (For the Work-From-Home Crowd!)
If you use part of your home exclusively for work, you may qualify for a home office deduction. This applies to self-employed individuals—not W-2 employees—so if you’re running a business from home, this could be a great way to lower your taxable income.
5. Energy-Efficient Home Improvements
Thinking about upgrading to solar panels or energy-efficient windows? The Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit can help offset some of those costs. You may be eligible for tax credits if you made qualifying energy-efficient upgrades in 2023.
6. Capital Gains Exclusion (When Selling Your Home)
Selling your home? If you’ve lived in it for at least two of the last five years, you may be able to exclude up to $250,000 (or $500,000 for married couples) of profit from capital gains taxes. This can be a huge benefit if your home has appreciated in value!
7. Medical Home Improvements
If you made home modifications for medical reasons—like adding wheelchair ramps or stairlifts—you may be able to deduct those costs as medical expenses. These need to be medically necessary and not increase the value of your home to qualify.
Don’t Forget to Keep Records!
To make tax time easier, keep detailed records of mortgage payments, property taxes, home improvements, and energy-efficient upgrades. Good documentation can make all the difference if you ever get audited or need proof of deductions.
Final Thoughts
While these tax breaks can add up, tax laws change frequently. It’s always a good idea to consult with a tax professional to ensure you’re maximizing your deductions and credits (we’re the Real Estate experts… not the tax experts 🤣). If you’re a homeowner, don’t miss out on these money-saving opportunities!
Have questions about buying or selling a home? Our team at The Jeff Probst Group is here to help—whether it’s finding your dream home or making sense of homeownership benefits.
