While many have already filed their 2024 tax return, a number of us might be waiting until closer to this year’s filing deadline — Tuesday, April 15.

In light of that, we are sharing some tax tips, ideas, and reminders for your consideration, especially those concerning real estate, homeownership, and other property-related matters. We hope these prove helpful to you and/or to any of your clients, fellow brokers/agents, and others in your sphere of influence.

The primary source of the ins and outs of all things tax return-related is, of course, the Internal Revenue Service. The IRS webpages that cover topics related to real estate include the following (click on any title to go to that page):

Real estate industry tax center

Licensed real estate agents tax tips

Reporting and paying taxes on U.S. real property interests

Real estate taxes: Avoiding problems

Tips on rental real estate, deductions, and recordkeeping

Financial resources – real estate

Tax benefits for homeowners

Sale of residence – real estate tax tips

These are just a few of many helpful IRS sources of relevant tax information.

To get a bit more specific, here are some of the benefits that the IRS says can help homeowners save on their taxes:

Deductible house-related expenses

Some of the costs a homeowner can deduct include:

• State and local real estate taxes, subject to limits.
• Home mortgage interest, also within allowed limits.

One wrinkle: Taxpayers have to itemize deductions to save on homeownership expenses.

On the other hand, it’s important to keep in mind that homeowners cannot deduct the following:

• Insurance on the home (including fire and comprehensive coverage and title insurance).
• Payments applied to reduce the principal of the mortgage.
• Wages the homeowner pays to domestic help.
• Depreciation.
• The cost of any utilities, such as electric, gas, and water.
• Most costs related to settlement or closing.
• Any forfeited deposits, down payments, or earnest money.
• Internet / Wi-Fi systems or services.
• HOA fees, condo fees, or other common charges.
• Basic home repairs.

Mortgage interest credit

People with lower incomes can apply the Mortgage Interest Credit to help them afford homeownership. Those who qualify can claim the credit every year for a part of the mortgage interest paid. A homeowner may be eligible if they were issued a qualified Mortgage Credit Certificate from their state or local government (that is only for a new mortgage on a main home).

Ministers and military housing allowance

Ministers and members of military services who receive a nontaxable housing allowance can deduct their real estate taxes and home mortgage interest. (They don't have to reduce their deductions based on the allowance, according to the IRS.)

In addition to the resources listed above, you’ll find a number of helpful questions and answers from the IRS (start at this link) that cover real estate taxes, mortgage interest, points, and other property-related expenses. Here is just a sampling of some of the many answers the IRS has provided:

Q: I have a mortgage for land that I intend to build on. Can I take the home mortgage interest deduction?
A: No, you can't deduct interest on land that you keep and intend to build a home on. However, some interest may be deductible once construction begins. You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it's ready for occupancy. The 24-month period can start any time on or after the day construction begins. As a qualified home, the interest paid may qualify as deductible mortgage interest, with certain limitations.

Q: Is interest paid on a home equity loan or a home equity line of credit (HELOC) deductible?
A: It depends. For tax years 2018 through 2025, if home equity loans or lines of credit secured by your main home or second home are used to buy, build, or substantially improve the residence, interest you pay on the borrowed funds is classified as home acquisition debt and may be deductible, subject to certain dollar limitations. However, interest on the same debt used to pay personal living expenses, such as credit card debts, is not deductible.

For tax years before 2018 and after 2025, for home equity loans or lines of credit secured by your main home or second home, interest you pay on the borrowed funds may be deductible, subject to certain dollar limitations, regardless of how you use the loan proceeds. For example, if you use a home equity loan or a line of credit to pay personal living expenses, such as credit card debts, you may be able to deduct the interest paid.

Q: I purchased a rental property last year. What closing costs can I deduct?
A: Generally, deductible closing costs are those for interest, certain mortgage points and deductible real estate taxes.

Many other settlement fees and closing costs for buying the property become additions to your basis in the property and part of your depreciation deduction, including:

• Abstract fees
• Charges for installing utility services
• Legal fees
• Recording fees
• Surveys
• Transfer taxes
• Title insurance
• Any amounts the seller owes that you agree to pay (such as back taxes or interest, recording or mortgage fees, sales commissions and charges for improvements or repairs).

Again, this is just a toe in the water. You’ll find many more helpful tips and reminders online and/or as you consult with your tax professional. We hope that this tax season is going, will go, or has gone smoothly for you and yours!

Note: We are providing this information based on IRS resources that were current as of the date of the blog. The content provided here is for informational purposes only and should not be construed as tax advice.

About EMTAR: Chartered in 1969, our Association’s 1,200+ REALTORS^® are a proud part of the 36,000+ members of Tennessee REALTORS^® and of the 1.5 million+ members of NAR, all working to serve the public and protect the rights of America’s property owners. EMTAR members are known not only for their unmatched real estate excellence and high ethical standards, but also for being generous, hospitable, others-focused, loyal, hardworking, and eager to help wherever and whenever help is needed.