tax season is here, and homeowners have a few ways to save money in 2025. mortgage interest, property taxes, home improvements, and green energy upgrades all have potential tax benefits. but you have to itemize deductions, which most people don’t do. is it even worth it for the average homeowner, or does this mainly help high earners?
so if i take the standard deduction, i can’t use any of these tax breaks?
Alden said:
so if i take the standard deduction, i can’t use any of these tax breaks?
yep, you have to itemize. around 90% of taxpayers just take the standard deduction because it’s usually higher than their itemized total.
who actually benefits from the mortgage interest deduction? seems like it’s mostly for people with expensive homes.
Toby said:
who actually benefits from the mortgage interest deduction? seems like it’s mostly for people with expensive homes.
pretty much. according to the tax foundation, high earners benefit the most. in 2020, 45% of people making over $200k itemized, while only 7.5% of those under $200k did.
wait, what’s the deal with the property tax deduction? there’s a cap, right?
Marlon said:
wait, what’s the deal with the property tax deduction? there’s a cap, right?
yep, the state and local tax (salt) deduction maxes out at $10,000. before 2017, there was no cap, but now you can only deduct up to that amount.
@Brigham
that’s a big deal for people in high-tax states. some folks used to deduct way more than $10k.
home improvements can be deducted too? or is that only in certain cases?
Alva said:
home improvements can be deducted too? or is that only in certain cases?
only certain improvements count. things that add value to your home or make it more accessible, like ramps or wider doorways, can be deducted. regular repairs don’t count.
what’s the deal with tax credits for green energy? are those better than deductions?
Lennon said:
what’s the deal with tax credits for green energy? are those better than deductions?
yeah, tax credits reduce what you owe directly, instead of just lowering taxable income. if you installed solar panels, you might get a 30% tax credit.
@Brigham
yep, there’s also a credit for energy-efficient home improvements like insulation and central air, up to $1,200.