As tax season approaches, homeowners in Louisville, KY, and beyond should be aware of how their homeownership status can impact their 2025 tax return. Owning a home comes with financial benefits, and understanding these tax advantages can help you maximize your deductions and credits. Here’s what you need to know about how homeownership can affect your taxes this year.

Mortgage Interest Deduction

One of the most significant tax benefits of owning a home is the mortgage interest deduction. Homeowners who itemize their deductions can claim interest paid on a mortgage for a primary or secondary home, reducing taxable income.

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Property Tax Deduction

State and local property taxes may be deductible up to a certain limit. This can be a substantial benefit for homeowners looking to reduce their tax burden.

Home Office Deduction

If you work from home, you may qualify for a home office deduction. This applies to homeowners who use part of their home exclusively for business purposes and meet IRS requirements.

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Capital Gains Exclusion

If you sell your primary residence, you may be eligible for a capital gains exclusion of up to $250,000 for individuals or $500,000 for married couples filing jointly, provided you meet certain ownership and residency conditions.

Energy-Efficient Home Improvements

Homeowners who make energy-efficient upgrades, such as solar panels or energy-efficient windows, may qualify for tax credits that help offset the cost of these improvements.

Points Deduction

If you paid discount points to lower your mortgage interest rate when purchasing your home, you might be able to deduct these costs from your taxable income.

How to Prepare for Tax Season

  • Gather your mortgage interest statement (Form 1098)

  • Keep records of property tax payments

  • Maintain documentation of home office expenses if applicable

  • Track home improvement receipts for potential deductions

  • Consult a tax professional to ensure you maximize all available benefits

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Ready to Become a Homeowner? Contact Us Today!

Owning a home not only provides stability and investment opportunities but also offers valuable tax benefits. If you’re considering buying a home in the Louisville, LaGrange, or Crestwood area, Monarch Realty Group is here to guide you through the process. Contact us today to get started on your home buying journey and take advantage of these tax benefits next year!