Tax Deductions for Homeowners

It's the beginning of the year, meaning tax season is upon us. As a homeowner, there are some specific deductions that you can take to help reduce your tax liability.

Mortgage Interest. If you have a mortgage on your home, you can take advantage of the mortgage interest deduction. You can lower your taxable income through this itemized deduction of mortgage interest.

Property Taxes. As a homeowner, you will have to pay property taxes at the state and local levels. You can deduct up to $10,000 of property taxes as a married couple filing jointly - or $5,000 if you are single or married filing separately.

Cost of Financing. When you purchase a home, there are costs associated with the financing that comes with it. Discount points help to lower your interest rate on the loan. If the points are purchased to reduce the mortgage interest rate, you can deduct the costs of the discount points.

Renewable Energy Tax Credit. Do you own an electric vehicle? Well, if you installed a home charger to charge your EV or solar panels, and many other items that help make your home energy efficient - including certain windows, you can deduct those items from your itemized taxes.

Exclusions of Capital Gains. If you were using the home as your primary residence for 2 of the last 5 years, you could keep some profits without any tax obligation. As a married couple filing jointly, you can keep up to $500,000 in capital gains. As a single filer or married couple filing separately, each party can keep up to $250,000 of capital gains without a tax obligation.

For more information about these deductions and any other deductions you may be able to receive, please contact your tax professional.