Products & Pricing
Online products
CD/download products
Mobile products
Self-employment taxes
Small business taxes
Compare products
TurboTax Advantage
Previous years' products
File an IRS extension
Access my downloads
Tools & Tips
Tax calculators
Tax tips & videos
Track my donations
TurboTax blog
After You File
Track my refund
Check my e-file status
Print my return
Amend my return
Access prior year returns
Go to Turbo
TurboTax Support
Frequently Asked Questions
Expert Services
How TurboTax works
Tax Reform

Tax Breaks and Home Ownership

Updated for Tax Year 2017


Home ownership brings with it not only many trips to home improvement stores, but also a slew of tax breaks. It's up to you to take full advantage of the write-offs available to you. Here's what you can and can't deduct.


Mortgage interest

For most people, the biggest home-related deduction is for mortgage interest. How do you figure out how much you've paid in mortgage interest during the year?

You should receive a statement from your lender by the end of January listing the mortgage interest you paid during the previous year. This statement will be labeled Form 1098. It may be attached to, or part of, your monthly mortgage statement, so be sure that you study your January statement carefully to identify any portion that may be labeled as Form 1098. The amount shown as interest paid on Form 1098 is the amount you deduct on your tax return.

Where do I take this deduction?

Fill out Schedule A, Itemized Deductions, to take a deduction for mortgage interest.

  • If you received Form 1098 reporting the amount of mortgage interest you paid for the year, record your interest deduction on Line 10.
  • If you didn't receive Form 1098, use Line 11 instead.

If your home loan is with a private party (for example, with the person from whom you bought the home), you may not receive a statement of interest paid even though your mortgage holder should complete one for you. You can still deduct the interest as long as your loan is secured by your home.

Report your lender's name, address and Social Security number on the lines next to Line 11. (You should have been given this information during the closing of your home purchase). Remember that you have to be liable for repayment of the loan to deduct mortgage interest. If you pay your son's or daughter's mortgage to help them out, for example, you cannot deduct the interest unless you co-signed the loan.

What about late charges?

You can deduct a late payment charge as home mortgage interest as long as the charge was not for a specific service you received in connection with your mortgage loan.

What about a prepayment penalty?

If you pay off your home mortgage early and you're required to pay a prepayment penalty, you may deduct that penalty as home mortgage interest as long as the charge was not for a specific service you received in connection with your mortgage loan.

For more information on mortgage interest, see IRS Publication 936: Home Mortgage Interest Deduction.

Deducting Points

When you buy a house, you often have to pay points to the lender to get your mortgage. These points can usually be deducted as prepaid interest. Other terms for points are:

  • Loan origination fees
  • Maximum loan charges
  • Loan discount
  • Discount points

You may deduct any points you pay, or points your seller paid on your behalf, in the year in which you pay the points, if you meet all of these requirements:

  • Your loan is secured by your primary residence (the one you live in most of the time).
  • Paying points is usual for your area.
  • The amount of the points isn't out of line for your area.
  • You use the cash method of accounting for expenses (you most likely do). Using the cash method means you report income in the year you receive it and deduct expenses in the year you pay them.
  • The loan was used to buy, improve or build your home.
  • The points are computed as a percentage of the loan principal.
  • The points are clearly delineated on your settlement statement.
  • You put cash into your home purchase in an amount at least equal to the points you (and the seller) were charged. If you and the seller were charged a total of $3,000 in points, for example, you pass this test as long as your down payment was at least $3,000.

Some points do not meet these criteria. They may still be deductible, but you have to deduct them over the life of the loan.

  • Points paid for refinancing generally can only be deducted over the life of the new mortgage. If you pay $2,000 in points to refinance a 30-year mortgage, for example, you'd deduct that amount over 30 years—about $67 a year. It's up to you to remember to take this deduction each year.
  • Points you pay on loans secured by a second home also can be deducted only over the life of the loan.

"Points" charged for specific services, such as preparation costs for a mortgage note, appraisal fees or notary fees, are not interest and cannot be deducted.

For more details on deducting points, see IRS Topic 504: Home Mortgage Points.

Real estate taxes

You can deduct annual real estate taxes based on the assessed value of your property by your city or state. Beginning in 2018, the total amount of state and local taxes, including property taxes, that you can deduct is limited to $10,000 per year.

Where do I find how much I've paid in property taxes?

  • Your mortgage interest statement may list the amount of real estate taxes you paid if you use an escrow or impound account with your lender to cover real estate taxes.
  • If your real estate taxes aren't included in escrow payments made with your mortgage payments, look through financial records to figure out how much you paid for property taxes during the year.
  • Be sure to pick up any real estate taxes included on your settlement or closing statement from when you purchased your home.

Caution: Don't deduct your payments into your escrow account as real estate taxes. Your deposits are simply money put aside to cover tax payments. You should deduct only the actual property tax payments made from the account by your lender during the year.

Where do I take the deduction?

If you itemize, deduct your real estate taxes on Line 6 of Schedule A.

What can't I deduct as property taxes?

You can't deduct charges for services to a specific property or for specific people even if the payments are made to the taxing authority in your area. Examples include:

  • A unit fee for the delivery of a service (such as water delivery)
  • A charge for a residential service, such as trash collection
  • A flat charge paid for a single service provided to you, specifically by your local government.
  • Amounts you pay for local benefits that tend to increase the value of your property, such as the construction of streets, sidewalks or water and sewer systems.
  • But you can deduct whatever you pay for assessments for repairs or maintenance.

Certain mortgage insurance payments

Through 2017, if you pay mortgage insurance premiums on a qualifying policy issued after 2006, you can generally deduct the premiums as additional mortgage interest. Claim the deduction on Line 13 of Schedule A.

The full deduction can only be taken if your Adjusted Gross Income (AGI) is $100,000 or less ($50,000 if you use married filing separate status). The deduction is phased out for incomes greater than this. The amount of PMI that you pay for the year can be found on Form 1098, which you receive from your mortgage lender.

Mortgage insurance, which protects the lender if you default, should not be confused with more common homeowner’s or fire insurance.

Home improvements

Save receipts and records for all significant improvements you make to your home, such as landscaping, storm windows and fencing. You can't deduct these expenses now, but when you sell your home the cost of the improvements is added to the purchase price of your home to determine the cost basis in your home. This will reduce any potential taxable gain that you may have from the sale of your home.

Home expenses you can't deduct

A number of significant costs of home ownership are not deductible, including:

  • Homeowner's insurance premiums
  • Fire insurance premiums
  • FHA mortgage-insurance premiums
  • Principal payments made on your mortgage
  • Title or mortgage insurance
  • Utilities, such as gas, electricity, water or trash collection
  • Most settlement costs on your closing or settlement statement, including transfer taxes and Mortgage Recording Taxes
  • Homeowner's association dues and fees

A TurboTax solution for every situation

See which tax prep product is right for you

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Security is built into everything we do
* Important Offer Details and Disclosures

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Absolute Zero $0 federal (1040EZ/1040A) + $0 state offer only available with TurboTax Federal Free Edition; offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected in March. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Self-Employed Offer with TurboTax Self-Employed: File your 2016 TurboTax Self-Employed return between 4/19/17 and 10/16/17 to receive your complimentary subscription to QuickBooks Self-Employed until 10/31/18. Activation by 12/31/17 required. Sign in to QuickBooks Self-Employed via mobile app or at; e-mail address used for activation and sign-in. Offer valid only for new QuickBooks Self-Employed customers. See for price comparison.
    • When you use TurboTax Self-Employed to file your 2017 taxes, you will have the option to renew your QuickBooks Self-Employed subscription. If you do not purchase TurboTax Self-Employed by 10/15/18, you will have the option of renewing your QuickBooks Self-Employed subscription by 10/31/18 for another year at the then-current annual subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section.
  • Pays for itself (TurboTax Self-Employed): Estimates based on deductible business expenses calculated at the self-employment tax income rate (15.3%) for tax year 2016. Actual results will vary based on your tax situation.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Expert Help, Tax Advice and SmartLook: Included with Deluxe, Premier and Self-Employed (via phone or on-screen); not included with Federal Free Edition (but available for purchase with the Plus bundle). SmartLook on-screen help is available on a PC, laptop or the TurboTax mobile app. TurboTax experts provide general advice, customer service and product help; tax advice provided only by credentialed CPAs, enrolled agents and tax attorneys. Feature availability varies by device. State tax advice is free. Service, area of expertise, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Return Access, My Docs and My Analysis & Advice features: Access to all tax-related documents we have on file for you is available until you file your 2017 tax return or through 10/31/2018, whichever comes first. Terms and conditions may vary and are subject to change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • #1 rated online tax prep provider: Based on independent comparison of the best online tax software by March 13, 2017.

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected in March. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Data Import: Imports financial data from participating companies. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2015 and higher) and QuickBooks Desktop (2011 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.
Online Software Products
CD/Download Products
Mobile Tax Apps
Help and Support
Tax Tools and Tips
More Products from Intuit