Tax Deductions for Homeowners: What You Can and Can’t Claim

Tax season is here, and if you’re a homeowner, you may be eligible for several tax deductions that can save you money. Understanding what you can and can’t claim can help maximize your tax savings while keeping you compliant with IRS rules. Let’s break it down.

What You Can Claim

1. Mortgage Interest Deduction

   • Homeowners can deduct interest paid on mortgage loans up to $750,000 for homes purchased after December 15, 2017.

2. Property Taxes

   • You can deduct up to $10,000 in state and local taxes, including property taxes.

3. Home Office Deduction

   • If you use part of your home exclusively for business, you may qualify for a deduction on home office expenses.

4. Mortgage Points

   • If you paid discount points to lower your mortgage interest rate, you may be able to deduct the cost.

5. Energy-Efficient Home Improvements

   • Installing solar panels, energy-efficient windows, or heating systems could qualify you for tax credits.

6. Medical Home Improvements

   • If you made home modifications for medical reasons (such as wheelchair ramps), these costs might be deductible.

What You Can’t Claim

1. Homeowners Insurance Premiums

   • Standard homeowners insurance is not deductible unless it’s for a rental property.

2. Homeowners Association (HOA) Fees

   • HOA fees are generally not deductible unless the property is used as a rental.

3. Mortgage Principal Payments

   • You can deduct interest but not the principal portion of your mortgage payments.

4. Home Improvements for Aesthetic Purposes

   • General renovations and remodeling that don’t improve energy efficiency or medical needs aren’t deductible.

5. Transfer Taxes & Closing Costs

   • These expenses are not deductible but may be added to the cost basis when selling your home.

Final Thoughts

Taking advantage of homeowner tax deductions can make a significant impact on your tax bill. Be sure to consult with a tax professional to ensure you’re making the most of your deductions while following IRS guidelines.

Mel & Zack Durham

PNW Homes Group | EXP Realty

360.481.2073

melandzack@pnwhomesgroup.com

http://www.melandzackdurham.com