Maximize Your Refund: 15 Tax Deductions for Homeowners in 2025

Itemizing your taxes is great when you are a homeowner. As you file taxes for the 2024 tax year, there are some deductions you may be able to take and others that you cannot. The standard deduction for the 2024 tax year is $29,200 for married couples filing jointly; $14,600 for single filers and married individuals filing separately; and $21,900 for heads of households.

Here are 15 more deductions you may take to increase your refund or the amount of taxes you owe.

Key Takeaways Itemizing deductions opens you up to audits so make sure you’re not deducting what an insurance company already reimbursed as a paid claim. Homeowners insurance doesn’t cover perils related to a home business and cannot be deducted as a tax deduction. You can write off commercial insurance for a home-based business.

1. Mortgage Interest Deduction

You can deduct home mortgage interest on the first $750,000 of a mortgage ($375,000 if married but filing separately) of indebtedness. Higher limits apply, up to $1 million ($500,000 if married but filing separately) for indebtedness that began 2017 or earlier. ^[4]

2. Home Equity Loan (HELOC) and Interest

You can make deductions on a home equity loan, only if the money was used to substantially improve the home or if the loan was used to buy or build a residence for that taxpayer.

Only prior to 2018, was interest tax deductible for any purpose.

Do you have a second mortgage loan on your home? A second mortgage is a type of home equity loan. Again, the second mortgage needs to be used to improve the residence substantially to fully qualify for deductions. ^[1]

3. Discount Points on a Mortgage

When you buy a home, you are given the opportunity to pay down your interest rate with what are called “discount points.” The great thing about discount points is that not only do they save you money in the long run (if you keep the home for many years, that is), and you can deduct those discount points from your taxes. If you’re not sure if you purchased discount points, it’ll be listed in your mortgage contract.

4. Homestead Exemption

Many states allow people to take an extra deduction on property taxes for the home they live in. If you rent the property, even part of the year, you may be ineligible for the tax exemption.

In California, you can deduct up to $7,000 on property taxes on your primary residence. ^[15] The amount you can deduct may be a set amount, like California’s law, or a percentage of the property value that is excluded from taxation. It’s important to look into your particular state’s homestead exemption for specifics.

5. Property Tax Deductions

Property taxes are the annual taxes you pay on your home. Also, in some states, you’re taxed for equipment, tools and machines used to create income. For the 2024 tax year, you may qualify for a state and local income tax deduction of up to $10,000 ($5,000 if married but filing separately) for property taxes you paid.

If your second property tax statement won’t be paid until after January 1, you can’t deduct it but can do so the following year. ^[5]

6. Home Improvements Tax Deductions

If you replaced an aging roof or you had to make medically necessary changes to the home for mobility’s sake, you can deduct these improvements from your taxes, but only if it meets capital improvement requirements set by the IRS. What this means is that the improvement extends the life of the home and increases its value. Partial repair of a roof does not qualify.

You may take deduction on improvements that are medically necessary or if it qualifies for the energy-efficient home improvement credit, up to $3,200. ^{[2] [3]}

7. Home Office Expense: Write Off!

Remote workers do not get a home office deduction, unless they are self-employed contract workers. Only business owners can do so. To deduct expenses for business use of the home, you must use part of your home in one of the six following scenarios:

1. It must be your principal place of business.

2. It must be a meeting place on a regular basis.

3. It must be a separate structure that's not attached to the home, used exclusively on a regular basis for work purposes.

4. It must be used for storage of inventory or product samples related to the business, if the home is the sole fixed location of your work.

5. It is for rental use.

6. It is a daycare facility.

The space that is deducted can’t be used for both personal and business purposes.

You can also deduct the business portion of real estate taxes, mortgage interest, casualty losses, utilities, insurance, depreciation, maintenance and repairs.

You can file the regular method with a Schedule C (Form 1040), the simplified option with Schedule A (Form 1040)or as a farming business or partner with Schedule F (Form 1040).

8. Home-based Business Insurance: Write Off!

You can’t write off your homeowners insurance as a business tax deduction. In fact, if you don’t have commercial coverage for your home-based business, your home insurance policy claim for business-related claims will be declined.

It’s best to have a home-based business insurance policy, which you can write off in its entirety. If you have just one employee you’re required by law (in every state) to have workers compensation, which you can deduct from taxes. Other home-based business insurance coverages may include:

• General Liability Insurance

• Professional Liability Insurance

• Business Personal Property Insurance

• Business Interruption Insurance

• Cyber Insurance

A business owners policy (BOP) may be the most cost effective insurance bundle.

You can also write off car insurance, if you have a commercial auto insurance policy, because, again, if you use your car for work purposes aside from a regular commute, you will not be covered with a personal automobile policy in the event of an accident.

You must be a contract-work self-employed individual or a business owner or partner. You can also deduct your business insurance costs from your income taxes.

9. Capital Gains Exclusion

When you sell something for profit, whether it’s for personal or an investment, the amount that goes over the cost basis is taxed as a capital gain. This is different from business income, which is not considered a gain.

When it comes to making a profit from selling a home, some or all of the profit may be exempt on your taxes. You may exclude up to $500,000 if married and filing jointly. You can exclude up to $250,000 if filing single, head of household or married filing separately.

To be eligible for the capital gains deduction, you must have lived in the home for at least two years as your primary residence and have not excluded the gain from another home sale in the prior two-year period. ^[8]

10. State and Local Deduction (SALT): Sales Tax

The Salt deduction is a federal tax break that offsets state and local taxes. The cap on this deduction is $10,000 and the limit for those married filing separately is $5,000. The state and local deduction is based on property taxes plus state income or sales taxes, but not both.

So, if you don’t own property but are itemizing your deductions, you can deduct up to $10,000 based on where you live. The Salt deduction ends at the end of 2025. ^[3]

The IRS allows you to choose between deducting your state and local income tax or sales taxes. If you recently bought all new appliances and furniture and spent more than your income taxes, this may be a great deduction for you if you pay less in property taxes.

11. Green Energy Upgrades Deduction

If you made upgrades to your home that are energy efficient, you may be eligible for the energy efficient home improvement credit. You may also qualify for a credit for having qualified battery storage technology. ^[6]

12. Moving Expenses: Tax Write Off for Military

Unless you serve in the military, moving expenses are no longer a deduction. The IRS even has a tool that determines which moving expenses are deductible and which form to use (form 3903). For instance, military members who have to move due to their job, can deduct the costs of that relocation.

If you’re not a military member but you moved prior to 2018 but didn't claim the moving expense tax deduction, you may be able to get a deduction for it this year using Form 1040.. If you were reimbursed for the moving expense by an employer, you cannot file a deduction. ^{[9] [10]}

13. Casualty Loss in Excess of Reimbursement

It’s important to report casualty losses to your insurance company first and only deduct what’s left over that came out of your pocket. If you had to repair or replace any property, including your car, the clothes in your home and your home, in the event of a theft, flood, hurricane, tornado, fire, earthquake, or volcanic eruption, you can deduct those losses in taxes. ^[12]

Remember, car insurance, specifically comprehensive insurance, will cover those losses, minus the deductible, which you can deduct from taxes as well as any outstanding balances.

Homeowners insurance will cover your home and other structures, as well as belongings but you’ll need a separate flood insurance policy and earthquake policy to cover those specific events.

Only file the remaining balance of costs of repair and replacement as a deduction.To deduct reimbursement can land you in hot water if there’s an audit. You can also file deductions if you were the victim of a Ponzi scheme.

14. Home Sale Exclusion

If you lived in the home you sold for two years out of the five previous years up to the sale, you may qualify for the exclusion. However, if you excluded the profit (called a “gain”) from the sale of another home during the two-year period prior to the sale of the recently sold property, you will not qualify.

If you qualify, you can deduct up to $250,000, if filing separately, or $500,000, if filing jointly. ^[11]

15. Charitable Donations: Write Off!

If you give away old furniture, cookware and dishes or any household items that may be used by those in need, keep your receipts and deduct these donations from your taxes. You can do the same with any charitable organization you’ve given money or property to in the past year.

What’s Not Eligible for a Tax Deduction

• Mortgage insurance premiums

• Cosmetic upgrades, like painting

• Closing and settlement costs

• Homeowners insurance

• Appliance repair costs

• Homeowners Association (HOA) fees

• Utilities (including Internet service, unless it’s a business expense)

• Home repairs

• Maintenance costs

• Domestic workers

• Home value depreciation

• Moving expenses if you’re not military