As tax season ramps up and April 15 approaches, Phoenix homeowners may want to check in with their financial professionals about housing-related deductions that could make a meaningful difference on their returns. Trevor Halpern, J.D., CEO of Halpern Residential at eXp, Phoenix native, ASU College of Law graduate, and the #1 independent agent at eXp Realty in Phoenix, with over $330 million in real estate sales since 2011, highlights key deductions and common “gotchas” that often trip up taxpayers.
The mortgage interest deduction is one of the most widely known benefits. Homeowners may be able to deduct interest on a loan secured by a qualified home if they itemize on Schedule A.
“This typically only benefits taxpayers whose itemized deductions exceed the standard deduction,” Halpern notes, “so it isn’t advantageous for everyone.” Similarly, the State and Local Tax (SALT) deduction allows for property tax deductions, though limits depend on filing status, income, and timing, meaning the amount may be less generous than some expect.
For new homeowners, points paid on a home loan at closing can also be deductible, essentially acting as prepaid interest. Halpern cautions that “whether you can deduct points upfront or over time depends on the loan and how it’s used, so it’s a definite ‘consult your tax pro’ situation.”
Interest on a home equity loan or HELOC may qualify for a deduction as long as the funds were used to buy, build, or substantially improve the home securing the loan. “A kitchen remodel? Possibly deductible. Paying off credit cards? Probably not,” he adds.
Homeowners with rental properties have additional advantages, including deducting expenses such as repairs, maintenance, and insurance, and claiming depreciation to recover property costs over time. In some cases, expenses can even exceed rental income, subject to IRS rules and limitations. Arizona taxpayers also have a local perk: they may be able to itemize on their state return even if they take the federal standard deduction.
Halpern emphasizes that all deductions should be confirmed with a certified tax professional based on individual circumstances, ensuring homeowners make the most of every available benefit.
