Tax Season Tips for Homeowners and Sellers

Tax season is officially here, and if you’re a homeowner or recently sold a property, you could be
eligible for tax benefits that reduce what you owe or increase your refund. But with changing
regulations and evolving property values, it’s important to stay informed about what you can
deduct, what records to keep, and how to prepare.

Here are smart, IRS-backed tips to help homeowners and home sellers navigate tax season
with confidence.

Top Tax Tips for Homeowners
Owning a home often comes with valuable tax perks. Here are a few deductions and credits you
should know about:

1. Mortgage Interest Deduction
One of the biggest tax breaks for homeowners is the mortgage interest deduction. If you itemize
deductions on your return, you may be able to deduct interest paid on your mortgage, up to
$750,000 in mortgage debt (per IRS guidelines as of 2023).

Source: IRS Publication 936 – Home Mortgage Interest Deduction

2. Property Tax Deduction
You can deduct up to $10,000 in combined state and local property taxes (or $5,000 if married
filing separately). Just be sure to check your annual mortgage statement or property tax bills for
the total amount paid.

3. Energy Efficiency Credits
If you upgraded your home with energy-efficient improvements, such as solar panels,
energy-efficient windows, or doors, you may qualify for a federal tax credit. The Energy Efficient
Home Improvement Credit can be worth up to 30% of the cost of improvements.

Source: Energy.gov – Tax Credits for Energy Efficiency

4. Points Paid on Mortgage
If you paid “points” when closing your mortgage (prepaid interest), you may be able to deduct
them in the year of purchase or over the life of the loan.

Tax Tips for Home Sellers
If you sold a home last year, tax season might look different, especially if you earned a profit.

1. Capital Gains Exclusion
You may be able to exclude up to $250,000 of profit from the sale of your home ($500,000 if
married filing jointly) if:

• You owned the home for at least two of the last five years.
• It was your primary residence.
• You haven’t excluded a gain from the sale of another home in the last two years.

Source: IRS Topic No. 701 – Sale of Your Home

2. Track Your Home Improvements
You can reduce your capital gain by keeping records of capital improvements made to the
home, like remodels, new roofs, or room additions. These improvements increase your home's
“basis,” lowering your taxable gain.

3. Report Closing Costs and Commissions
Some costs associated with selling—like agent commissions, title fees, and legal fees—can
also be used to reduce your taxable gain. Be sure to keep your HUD-1 Settlement Statement or
Closing Disclosure.

What Documents Should You Keep?
Make tax season easier by organizing:

• Mortgage interest statement (Form 1098)
• Property tax receipts
• Closing disclosures or HUD-1
• Receipts for capital improvements
• Proof of energy-efficient upgrades
• Records of property sale and purchase price

When to Talk to a Tax Professional
Every homeowner’s situation is different. If you’re unsure about deductions or eligibility, consult
with a CPA or tax advisor to ensure you’re maximizing your benefits and avoiding errors. It’s
especially important if:

• You sold property or own multiple homes
• You’re self-employed and work from home
• You made large home improvements

Final Thoughts
Whether you're a proud homeowner or just closed a sale, tax season doesn’t have to be
stressful. Take advantage of the benefits available to you, stay organized, and seek help when
needed. At Hub City Title, we’re always here to help guide you through the real estate side, so
you can focus on everything else.