9 Tax Deductions That Can Save Homeowners Money

As a homeowner, you may be eligible for some federal homeowner tax deductions that can save you money. Always consult with your tax expert regarding federal tax breaks for your particular circumstances.

Be sure to ask your tax consultant if you are eligible for any of the following tax deductions for homeowners:

1. Home mortgage interest is a deductible expense, within certain parameters, when itemized on Schedule A (Form 1040). To qualify, you must have a mortgage on your home and be making interest payments. Mortgage interest that has been paid in a year in which you did not own your home does not qualify.

2. Suppose you purchased or refinanced a home and paid points (also known as discount points, loan origination fees, or maximum loan charges). In that case, you may be eligible for home purchase tax deductions over the life of the loan or in the year paid, depending on your situation. Consider points as prepaid interest, which means they are paid before the homeowner makes their annual mortgage payments.

3. Qualified home mortgage insurance may also be deductible if your adjusted gross income on Form 1040 is no more than $109,000 in the taxable year. (This should not be confused with homeowners insurance, which typically does not qualify as a homeowner tax deduction.) Learn more about private mortgage insurance.

4. Local and state real estate property taxes are also deductible on Schedule A (Form 1040). If you purchased a house during the tax year, don’t forget about any property taxes for which you may have reimbursed the seller. You can include these reimbursements as a homeowner tax deduction.

5. Certain costs, including title insurance, advertising, and real estate broker fees, may also be claimed on your tax return if you sold a home during the tax year.

6. If you are an active-duty member of the Armed Forces and you moved more than 50 miles for your job, a portion of your moving costs may be deductible.

7. If you are self-employed, you might be able to claim home office expenses, such as painting the room, purchasing supplies, and more, as tax deductions for homeowners.

8. If you made certain energy-saving home improvements, you might be eligible for renewable energy tax credits for homeowners. 

9. Some tax breaks for homeowners might be available if you made certain medically necessary home improvements, like adding a wheelchair ramp, walk-in tub or shower, stairlift, elevator or escalator, or security system with an audible alarm. Tax breaks may also include enlarging doorways and hallways to accommodate a wheelchair.

In addition to seeking the advice of a tax professional about tax exemptions for homeowners, be sure to have all the necessary documentation in order before claiming deductions. 

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