Owning a home brings a suite of financial and tax benefits. But maximizing those breaks takes a bit of planning and a keen eye for deductions that are unique to homeowners.
If you have a mortgage, you can deduct the interest on your loan as an itemized deduction. The mortgage interest deduction is subject to certain limits, which are described in this section and in Pub. 525, Residential Mortgage Interest Deduction.
You can also Tax Deductions for Homeowners. These taxes are imposed on your property by local, county, city or other municipality. They are normally paid either at the time of sale or through an escrow account. You can usually get a copy of the seller’s real estate tax bills from the settlement company at closing.
Top Tax Deductions for Homeowners to Maximize Savings
The Tax Cuts and Jobs Act limits the amount of home equity interest that is deductible to $100,000 for married couples filing jointly, or $750,000 for single filers. However, you can still deduct the interest on a home equity loan that is used to buy, build or improve your main or second home.
You can also deduct certain other settlement fees and closing costs that are associated with buying your home. These include title insurance premiums, attorney fees, transfer taxes, stamp duties, recording fees, and other governmental charges. You can also deduct a portion of the cost of a home warranty. Also, you may be able to deduct expenses for necessary improvements to your home. These might include energy-efficient upgrades or updates to accommodate a disability.
