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Home Ownership Tax Deductions

Home Ownership Tax Deductions

...the amount of money you save on your annual income tax bill depends on a variety of factors...

TurboTax and

You know you can get a deduction for your mortgage interest, but what else can you deduct for your primary or secondary home?

At tax time, your house is not simply a home: it’s a giant tax deduction. You get to deduct:

  • -Your property taxes.
  • -The mortgage interest on your primary residence, as well as any secondary residence you own. (There are limits, but relatively few taxpayers are affected.)
  • -The interest on up to $100,000 borrowed on a home-equity loan or home-equity line of credit, regardless of the reason for the loan.
  • -Points you paid when purchasing the house (or convinced the seller to pay for you).
  • -For homes purchased in 2007, the premiums paid for private mortgage insurance in 2007. (The right to this deduction disappears as adjusted gross income rises from $100,000 to $110,000 on a joint return and from $50,000 to $55,000 on a single return.)
  • -Home improvements required for medical care.

How Much Can I Save?

The actual amount of money you save on your annual income tax bill depends on a variety of factors, such as:

  • -Your filing status (single, head of household, married filing jointly, married filing separately)
  • -Your standard deduction
  • -Your other itemized deductions
  • -Your taxable income

Your home-related deductions plus your other itemized deductions must add up to more than the standard deduction, or they won’t save you any money.

What Can’t I Deduct?

You can’t deduct the following payments for your primary residence:

  • -Dues to a homeowners’ association
  • -Insurance on your home
  • -Appraisal fees for your home
  • -The cost of improvements to your home. But keep those receipts: They may help you reduce your taxes when you sell your home.

Back to “GovCentral’s Ultimate Tax Guide.”

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