Home Owners Tax Deductions

There are really only two reasons not to own a home-you may live rent free with your parents or friends or perhaps you are planning on moving in 3 years or less. Even if you are single, but plan on staying in the area for more than 3 years, consider buying a home.
Ask any homeowner what's so great about owning versus renting, and most will say "the tax deductions!" Because all homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns. However, the maximum mortgage debt on which you can deduct interest for new loans is now $750,000. If your mortgage existed on Dec. 14, 2017, you’re grandfathered in on the $1 million maximum.
Homeowners are allowed to deduct their fixed-rate and adjustable rate mortgage (ARM) interest payments & property mortgage insurance (PMI) from their income.
This calculator will help you to estimate the tax savings that you will realize due to the deductible interest and property tax payments you will make on your mortgage.

Tax Savings Calculator

Additional Tax Deductions

The tax incentives for deducting the mortgage interest and PMI are not the only tax benefits in owning a home, you may also qualify for the following deductions if you itemize: 
  • Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid it.
  • If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year. 
  • Beginning with tax years after 2017, the total amount of deductible state and local income taxes, including property taxes, is limited t $10,000 per year.
  • Deductions for upgrades to homes to make use of renewable energy may also be eligible for a tax credit to offset some of the costs.
  • If you have a home office you use only for business, you may be able to claim it.
  • In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees.
  • When you sell your primary residence, you can make up to $250,000 in profit if you’re single, or $500,000 if you’re married, and not owe any taxes on those gains. Most people are eligible for this exclusion, but you must have lived in your home for at least two of the five years before you sell.