Owning a home is pretty awesome, right? Not only do you get to enjoy the comfort and pride of having your own space, but come tax season, being a homeowner can really pay off—literally! Let’s break down five tax deductions you should absolutely know about for the 2024 tax season, let’s dive in!
1. Mortgage Interest Deduction
Let’s kick things off with the big one: the mortgage interest deduction. If you’re making monthly mortgage payments, a chunk of that is going toward interest—and guess what? You can write it off on your taxes!
What It Means for You: Your lender will send you Form 1098, which shows how much interest you’ve paid. You can deduct that amount and potentially save big.
Friendly Tip: Did you refinance your home recently? You might still qualify, but there are some specific rules, so check the details or ask a tax pro.
2. Property Tax Deduction
Paying property taxes is just part of the deal when you own a home. The good news? Uncle Sam lets you deduct those taxes from your income, up to a limit.
How It Works: The cap for state and local taxes (including property taxes) is $10,000. Be sure to keep receipts or proof of payment handy when you file.
Friendly Tip: This one’s easy to forget about, so don’t leave money on the table!
3. Home Office Deduction
Are you part of the work-from-home crowd? If you’ve got a dedicated space in your house that you use exclusively for work, you might qualify for this deduction. However, this doesn’t apply to everyone—particularly renters or those with shared spaces—so be sure to confirm your eligibility.
How It Works: You can either calculate actual expenses (like utilities, rent/mortgage interest, etc.) or use the simplified method, which is $5 per square foot of office space (up to 300 square feet).
Friendly Tip: The key here is exclusivity. That corner desk in your living room where you also binge Netflix? Probably not going to cut it.
4. Energy-Efficient Home Improvements
Did you upgrade your home with energy-efficient windows, doors, or solar panels last year? High five! You’re not just saving on your energy bills—you might also qualify for some sweet tax credits.
What It Covers: The Energy Efficient Home Improvement Credit lets you deduct a percentage of what you spent on eligible upgrades.
Friendly Tip: Hang on to those receipts and any certification documents from your contractor. They’ll make filing much easier.
5. Points Paid on Your Mortgage
If you bought a home or refinanced and paid points to lower your interest rate, this one’s for you. Points are prepaid interest, and they’re tax-deductible!
How It Works: If you paid points as part of your closing costs, you might be able to deduct them fully in the year you paid them (or spread them out over the life of the loan for refinances).
Friendly Tip: Check your closing disclosure or settlement statement for details on points paid.
Bonus Tips for Tax Season
Stay Organized: Keep all your home-related documents in one place. Come tax time, you’ll thank yourself for being prepared.
Work With an Expert: Tax laws can be confusing, so don’t hesitate to reach out to a professional who knows the ropes.
Keep Up With Changes: Tax laws evolve. Stay informed so you can take full advantage of what’s available to you as a homeowner.
Wrapping It Up
Owning a home in Utah isn’t just about having a roof over your head—it’s also an opportunity to save money and build wealth. These five tax deductions can help you keep more cash in your pocket this tax season, but it’s important to note that not all deductions apply universally. Be sure to verify which ones are right for your situation.
Please note, this information is not tax or financial advice. Homeowners' eligibility for deductions may vary based on individual circumstances, so always consult with a qualified tax professional to verify what deductions are right for your specific situation.
If you’re not sure where to start or have questions, I’m happy to help. As an Associate Broker with Ascent Real Estate Group in Ogden, UT, I’m here to provide guidance every step of the way.
Eric Trostle - Helping you turn your real estate dreams into reality—with zero pressure.