October 27, 2025
Note: All tax information contained in this article is as of the publication date. Be aware that tax rules are always subject to change, and the IRS website is your official source for the latest forms and guidance.
The federal government provides a number of tax deductions and credits to help ease some of the costs of owning a home (or homes). If you qualify, they could help lower your tax bill. As you prepare your tax filings this year, here are some common tax breaks to look out for.
You may be able to deduct your mortgage interest payments on your federal return if you meet a few requirements. The home mortgage interest deduction appears on IRS Schedule A (Form 1040), which means you must itemize deductions in order to claim it. If you choose to take the standard deduction instead, you would not be able to deduct your mortgage interest on your return.
Generally, you may deduct the mortgage interest you pay on your main home, where you reside most of the time, or on your second home. And these homes do have to be yours—that is, you have an ownership interest.
So how much can you deduct?
The deduction limit depends, in part, on when you took out the mortgage, the mortgage amount, and how you use the mortgage proceeds. In most cases, you can deduct all of your home mortgage interest if certain criteria are met.
Per the IRS, you can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of your mortgage debt. However, higher limitations – $1 million (or $500,000 if married filing separately) – apply if you are deducting mortgage interest from a loan taken out before December 16, 2017.
Bear in mind that these are general guidelines to the home mortgage interest deduction. There are additional qualification rules and exceptions that might apply to you. The IRS provides the complete details in Publication 936. Consider checking in with a tax professional or your loan officer to confirm your eligibility for this valuable deduction.
In broadest terms, points are certain charges you pay in order to get a mortgage. For instance, points can refer to loan origination fees or prepaid interest.
Sometimes buying a home can feel like you’re paying fees on top of fees. The good news is that you may be able to deduct prepaid interest points (also known as “discount points”) if you itemize deductions on your individual tax return and if certain criteria are met.
IRS Publication 936 provides a flowchart to help you figure out whether you can fully deduct your points for a given tax year (see the section titled, "Points").
Want to see if you’re eligible for other mortgage-related tax deductions? The IRS has an interactive tool to help you get started. You will need your filing status, basic income information, and an estimated total of the amounts paid for mortgage interest and points.
If you itemize deductions on your federal return, you may also be able to deduct the annual real property (or real estate) taxes you pay to your local and state governments.
Under the new tax law (the One Big Beautiful Bill Act of 2025):
For more information, visit the IRS website or consult with a tax professional.
Good to know: If you use an escrow account to pay your annual real estate taxes, you can only deduct the amount that was paid out to cover those taxes in a given year. In other words, any additional deposits to the escrow account that were not used to pay taxes are not deductible.
To learn more about the state and local tax deduction for homeowners, see IRS Publication 530.
Generally, homeowners who make certain qualified energy-efficient home improvements may be eligible to claim two residential energy tax credits:
Be aware that due to tax law changes made by the One Big Beautiful Bill Act of 2025:
For more information, visit the IRS website. If you have questions about your eligibility to claim the credits, speak with a tax professional.
This article is for informational purposes only and is not a substitute for individualized professional tax advice. Individuals should consult their own tax advisor for matters specific to their own taxes. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA and Goldman Sachs & Co. LLC are not providing any financial, economic, legal, accounting, tax or other recommendations in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates. Neither Goldman Sachs Bank USA, Goldman Sachs & Co. LLC nor any of their affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements of any information contained in this document and any liability therefore is expressly disclaimed. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.
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