New homeowners can claim several valuable tax deductions, though most initial closing costs are not deductible. The primary ongoing deductions include mortgage interest, property taxes, and discount points. To claim them, you must itemize your deductions rather than take the standard deduction.
Deductible house-related expenses
The most chronically overlooked tax deductions are state sales tax (valuable if you made major purchases or live in a state without income tax) and out-of-pocket charitable expenses. Because taxpayers focus on major items like mortgage interest, these small-but-mighty write-offs frequently slip through the cracks.
The $6,000 tax deduction is a temporary federal tax break designed to help older Americans reduce their taxable income. It applies from the 2025 through 2028 tax years.
Basically, the de minimis safe harbor allows businesses to deduct in one year the cost of certain long-term property items. IRS regulations set a maximum dollar amount—$2,500, in most cases—that may be expensed as “de minimis,” which is Latin for “minor” or “inconsequential.” (IRS Reg. §1.263(a)-1(f) (2025).)
Congress reversed the much-discussed $600 rule for third-party settlement organizations, so the old federal threshold is back for tax year 2025.
Capital improvements are not immediately tax deductible for a personal residence, but they offer significant long-term tax benefits. By adding the cost of improvements to your home's "cost basis," you reduce your taxable profit when you eventually sell. Immediate deductions apply if the property is used for business or rentals.
The tax deduction for seniors over 65 or older is a new tax introduced with the One Big Beautiful Bill Act. It allows them to claim an additional deduction of up to $6,000 on top of either: The base standard deduction (available to all Americans) Itemized deductions.
This new rule means that if you work to earn an income, you can claim a $1000 standard tax deduction when you do your tax return. Remember, that's a $1000 tax deduction – not a $1000 tax refund.
Yes, you can deduct Medicare premiums, including Parts A, B, C (Medicare Advantage), and D, as well as Medigap premiums. However, how you deduct them depends on whether you are self-employed or retired/W-2 employed.
Returns that reliably trigger DIF attention include Schedule C filers with expense ratios outside industry norms, returns claiming home office deductions by W-2 employees, returns with large charitable deductions relative to AGI, returns showing cash-intensive business activity, returns with foreign accounts or ...
To be 100% tax deductible, an expense must be "ordinary and necessary" for your specific trade or business.
The IRS "one-time forgiveness" program, officially known as First-Time Penalty Abatement (FTA), is an administrative waiver that waives certain late-filing, late-payment, and late-deposit penalties.
Mortgage interest deduction is permanent
Trump's 2025 tax cuts and spending legislation make the mortgage interest deduction cap permanent. This deduction was set up to expire after 2025 under the TCJA, and revert to the previous $1 million cap.
As a newly minted homeowner, you may be wondering if there's a tax deduction for buying a house. Unfortunately, most of the expenses you paid when buying your home are not deductible in the year of purchase. The only tax deductions on a home purchase you may qualify for is the prepaid mortgage interest (points).
The 30% rule in remodeling is a financial guideline suggesting that the total cost of your renovations should not exceed 30% of your home's current market value.
IRS extra standard deduction for older adults
For 2025, the additional standard deduction is $2,000 if you're single or file as head of household. If you're married, filing jointly or separately, the extra standard deduction amount is $1,600 per qualifying individual.
The amount you can claim without receipts depends entirely on your location and the type of expense. Certain standard deductions require no proof at all, while specific work or business expenses use flat-rate formulas.
Get £50 added to your pension for free with PensionBee¹. Capital at risk. For a salary of £400,000, your take-home pay will be £223,786. You'll pay £166,203 in Income Tax and £10,011 in National Insurance contributions per year.
The $6,000 senior "bonus" in the "One, Big, Beautiful Bill" (OBBBA) is a temporary, additional tax deduction for taxpayers aged 65 and older. It is specifically designed to reduce taxable income and offset taxes on Social Security benefits.
The "One Big Beautiful Bill" (OBBBA) is a major tax reform package signed into law that introduces significant tax breaks and financial rule changes for seniors. The core feature for retirees is a temporary, supplemental senior tax deduction that can save qualifying individuals thousands of dollars on their tax returns.
No, there is no separate or extra stimulus payment being issued. However, many Americans are receiving larger tax refunds this year than in previous years.
The most overlooked tax break depends on your situation, but the Saver’s Credit (Retirement Savings Contributions Credit) and out-of-pocket charitable/medical expenses consistently top the list. These breaks reduce your tax bill dollar-for-dollar without requiring you to itemize.
Flooring: Fixing damaged planks can count as a repair, while replacing all flooring would be an improvement.
A common way to defer or reduce your capital gains taxes is to use tax-advantaged accounts. Retirement accounts such as 401(k) plans, and individual retirement accounts offer tax-deferred investment. You don't pay income or capital gains taxes on assets while they remain in the account.