Unlocking Tax Benefits for Homeowners
- MyTAXPrepOffice Editorial Group
- Jun 25
- 2 min read
As trusted advisors, it’s our role to spotlight savings opportunities for clients navigating homeownership. The IRS’s recent Tax Tip outlines several key benefits—here’s how we can help our clients maximize their return:
1. Itemizing for Deductible House‑Related Expenses 🏠
Mortgage interest remains deductible for clients who itemize, within current limits ($750K for post‑2017 loans; $1 M for pre‑2018.
State and local real estate taxes are deductible too—but capped at $10,000 combined (including income or sales taxes). Ensure clients review Schedule A and related worksheets (Publications 530 & 936) to determine eligibility.
2. Educating Clients on Non‑Deductible Costs
Awareness is key. Homeowners often mistakenly believe they can deduct insurance, utilities, closing costs, renovations, HOA dues, or home repairs—but these aren’t eligible. Clarifying this prevents wasted tax planning.
3. Mortgage Interest Credit for Lower‑Income Clients
Clients who have a Mortgage Credit Certificate (MCC) from state/local programs can claim a credit (not a deduction) for part of their mortgage interest paid. Make sure they’ve filed Form 8396 and understand this streamlines benefits beyond itemized deductions.
4. Treating Housing Allowance Recipients Equitably
For ministers or military service members receiving nontaxable housing allowances, the IRS confirms they can still deduct real estate taxes and mortgage interest—unreduced by allowances It’s crucial we account for these clients correctly.
5. Highlight Energy & Clean‑Energy Credit Opportunities
Although not detailed in the IRS article, clients may also benefit from:
Energy Efficient Home Improvement Credit: 30% of costs (up to $1,200/year, and $2,000 for specific installations).
Residential Clean Energy Credit: 30% credit for solar, geothermal, wind, and battery storage installations (no limit through 2032). Keep updated on credits under the Inflation Reduction Act—they can offer sizable savings.
Why This Matters for Tax Professionals
By mastering these provisions, you can help clients:
Lower taxable income through itemized deductions.
Claim valuable credits, reducing tax liability directly.
Avoid pitfalls by knowing what doesn’t qualify.
Serve niche clients (e.g. clergy, military) with confidence.
Actionable Practices for Your Office
Checklist: Include mortgage interest, real estate tax, housing allowance, credit certificates, and energy‑credit eligibility in client intake forms.
Review Publications: Guide clients through Pub. 530, Pub. 936, and Forms 8396/5695—helping them maximize benefits and avoid errors.
Stay Updated: Tax law evolves post‑2025 (e.g. potential SALT cap changes), and energy‑credit rules grow under the Inflation Reduction Act.
Final Thoughts
The IRS’s guidance on homeowner tax benefits empowers us—and our clients. By incorporating these strategies, we help homeowners save money, simplify planning, and make informed financial decisions. Let’s ensure every eligible client gets the full benefit they deserve.
Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.
