Other Tax Relief for Homeowners

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Other Tax Relief for Homeowners

Here are some more ways to save money on your home.

Points

Points are a prepayment of principal that you can make before you take out the actual mortgage. They cover various administrative fees. A point is one percent of the principal. If desired, you can pay for more than one point; one to three points are most common. The effect of paying points up front is, of course, less interest you must pay over the life of the loan.

Mortgage points are fully deductible; refinanced mortgage points are also deductible, but over the life of the loan, not all at once.

Private mortgage insurance premiums

Premiums you pay for private mortgage insurance are no longer deductible, though there is a push to make them so. Stay tuned for updates from the IRS.

Home office deduction

Do you have a home office that is used regularly and exclusively for business? If so, you can deduct the rent or mortgage paid for that portion. You can deduct other expenses associated with that portion; insurance, utilities, and repairs count as valid expenses.

Moving costs

Moving because of a new job? Employment-related moving expenses are no longer deductible, beginning in 2018. Some exceptions for military personnel were kept intact. They are still deductible for previous years, however. The deduction is scheduled to resume in 2026.

Energy efficiency products

Expenses for certain types of energy-efficient furnaces, doors, windows, roofs, insulation, and other home parts can get you a tax credit on your federal taxes. The amount and the eligibility for it often change from year to year. Consult IRS Form 5695 for more information.

The IRS may issue further clarification on tax-deductibility matters in upcoming years.