7 tax deductions no homeowner should miss

Owning a home comes with lots of expenses, including , maintenance costs, homeowners insurance and . Fortunately, some of these costs are tax-deductible.

You'll need to itemize your deductions to benefit from these tax breaks, so it's important to calculate whether you can write off enough to make it worth not just taking the standard deduction.

You can use the interest you pay on your mortgage to lower your taxable income for the year. This can be especially valuable for new homeowners, since most payments in the first few years go toward interest rather than principal.

Your servicer should provide you with Form 1098, which shows the amount of interest you paid for the year. Single people or married couples filing jointly can deduct interest on the first $750,000 of their home, while married couples filing separately can deduct interest on the first $375,000 of their home.

If you took out your mortgage between Oct. 13, 1987, and Dec. 16, 2017, the limit is $1 million for single people and married couples filing jointly, and $500,000 for couples filing separately.

There is no cap for mortgages taken out before Oct. 13, 1987.

Beginning with 2026 tax returns (filing in 2027), mortgage insurance premiums will again be tax-deductible for qualifying homeowners. This deduction expired after the 2021 tax year, but was reinstated as part of the One Big Beautiful Bill Act and is now permanent.

Considered part of the mortgage interest deduction, the reinstated tax break covers private mortgage insurance (PMI) on conventional loans, as well as mortgage insurance premiums (MIP) paid on FHA loans.

It's available to homeowners with an adjusted gross income of up to $100,000 (or $50,000 for married couples filing separately). The deduction is phased out for taxpayers with higher incomes.

You should receive Form 1098 from your lender with the amount of mortgage insurance you've paid in the prior year. You'll need it to claim the deduction.

Your lender may let you buy discount points (also known as mortgage points) to get a lower interest rate. Depending on your circumstances, you may be able to deduct the cost of these points as a kind of mortgage interest.

According to the IRS, you can deduct discount points in full in the year you bought them if:

1. You use the mortgage loan to buy or build your primary residence.
2. Your primary residence is the loan's collateral.
3. Paying points is a common business practice in your area.
4. The points paid weren't higher than what's typically charged in your area.
5. You use the cash method of accounting, which means you report income in the year you receive it and deduct expenses in the year you pay them.
6. The points paid weren't for items usually listed separately on the settlement sheet (like appraisal fees, inspection fees, title fees, attorney fees or property taxes.)
7. The funds paid at or before closing, including any points the seller paid, were at least as much as the points you bought. You can't have borrowed the funds from your lender or mortgage broker to pay for the points.
8. The points were calculated as a percentage of the principal mortgage amount.
9. The amount shows clearly as points on your settlement statement.

If you don't meet any of these requirements, you might still be able to deduct the points on your taxes over the life of the loan.

As a homeowner, you can deduct state and local property taxes from your federal return up to $10,000 (or $5,000 if married filing separately).

According to the IRS, you can also deduct state and county taxes for the maintenance or repair of streets, sidewalks, sewer lines and other local benefit taxes.

As of 2017, you can only deduct interest from home equity loans and home equity lines of credit (HELOC) if you used the money for home improvements or to buy or build another home.

That provision was slated to expire in 2025 but was renewed through 2028 by the One Big Beautiful Bill Act.

You can deduct the interest on the first $750,000 of a home equity product if you're single or a married couple filing jointly or $375,000 if you're married filing separately. If you took out the loan before Dec. 16, 2017, the limit is $1 million for single people and married filing jointly, or $500,000 for married filing separately.

Bank of America provides HELOCs of up to $1 million with no application or account fees and no closing costs.

If you're a freelancer or run a business from your home, you may be able to take the home office deduction, using IRS Form 8829, Expenses for Business Use of Your Home

The office must be for regular and exclusive business use to qualify for a deduction. (If you're working at home for an employer, it doesn't qualify.)

The amount you can deduct depends on how large the space is in relation to the rest of your home. If your office is 300 square feet or smaller, you can use the simplified option at a rate of $5 per square foot, up to a $1,500 maximum.

You can deduct home improvements that were made to help a member of your household with a medical condition. Examples include lowering kitchen cabinets, renovating a shower and adding ramps, handrails or a stair lift.

If the improvement raised the fair market value of your property, however, you have to subtract the value of that increase from your deduction. (You can find more information on IRS Publication 502.)

You may also be able to deduct 30% of the cost of qualified energy-efficient improvements on your primary residence, up to $3,200.

• $1,200 for energy property costs and certain energy-efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600) and home energy audits ($150)
• $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers

The credit is nonrefundable, so you can't get back more than you owe in taxes. And it expires at the end of 2025.

If you need a loan to pay for improvements, LightStream and PenFed are both on CNBC Select's list of best home improvement loans.

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