# Homeowner tax deductions: the yearly papers to pull together

[Home](/) / [Tax document checklists](/checklists/tax-documents) / Homeowners

By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-11-02, updated 2026-11-02.

> **In brief:** The tax deductions for homeowners are mortgage interest and property tax, claimed only if you itemize, plus a few credits and the exclusion when you sell. Each year, gather every Form 1098, the escrow statement, tax bills, home equity loan records and improvement receipts.

## The checklist: Homeowner’s yearly tax folder: loans, property tax and basis

**Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026.

Use this list each tax season for a home you already own. Tick each line when it is in the folder; the last group stays on file until after you sell.

### Mortgage and loans

- [ ] Form 1098 for each mortgage: Boxes 1, 5, 6 and 10; one form per loan and servicer
- [ ] Form 1098 box 2 (principal owed) and box 3 (origination date): The debt-limit test uses them; loans before or after December 15, 2017 follow different limits
- [ ] Points shown in Form 1098 box 6, including seller-paid points: Only in the year you bought; seller-paid points also lower your basis
- [ ] Year-end statement for each loan: Backs up interest when a loan moved servicers or no Form 1098 came
- [ ] Home equity loan or HELOC statements: Interest paid this year, from the lender
- [ ] Receipts showing what home equity money paid for: Contractor invoices for work on the home
- [ ] Closing disclosure of any refinance: Points paid, and the old loan’s payoff date

### Property tax and escrow

- [ ] Property tax bills for the year: Every installment, from the county or city
- [ ] Proof of property tax payment: Bank record or receipt for taxes paid directly
- [ ] Annual escrow account statement: Taxes and insurance the lender paid out of escrow
- [ ] State income tax paid or sales tax records: They share the SALT cap with property tax: $40,000 for 2025, $40,400 for 2026

### Credits

- [ ] Energy improvement invoices for work done in 2025: With the completion date; nothing qualifies after 2025
- [ ] Manufacturer certifications for energy items: Kept on file, not sent with the return
- [ ] Last year’s Form 5695: Shows any clean energy credit carried forward
- [ ] Mortgage Credit Certificate and last year’s Form 8396: Only if a housing agency issued you a certificate

### Other home situations

- [ ] Days the home was rented to others: Calendar with dates and rent received, if any
- [ ] Home office measurements and costs: Only for self-employed owners who work from home
- [ ] Doctor’s note and invoices for medical home changes: Ramps, grab bars or widened doors for a medical reason
- [ ] Last year’s return: Shows whether you itemized and what carried over

### Keep until after you sell

- [ ] Purchase closing papers: Price and closing costs that make up your basis
- [ ] Improvement invoices for every year you own the home: Roof, additions, remodels, with dates and amounts
- [ ] Dates you owned the home and lived in it: For the ownership and use tests on a sale

Download: [PDF](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/homeowners.pdf) · [Word](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/homeowners.docx) · [Excel tracker](https://dokutrak.com/downloads/pseo-v2/f1-tax-document-checklists/homeowners.xlsx)

## What homeowners can deduct, and what they cannot

Owning a home gives you two main deductions: home mortgage interest and state and local real estate taxes ([IRS Publication 530](https://www.irs.gov/publications/p530)). Both go on Schedule A, so they help only when you itemize ([IRS Publication 530](https://www.irs.gov/publications/p530)). An owner with a small loan may be better off with the standard deduction.

The bar your house costs must clear depends on the year. On a 2025 return, the standard deduction is $15,750 single or $31,500 joint ([Form 1040 instructions (2025)](https://www.irs.gov/instructions/i1040gi)). On a 2026 return, it rises to $16,100 single or $32,200 joint ([IRS, 2026 inflation adjustments](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill)). Total your mortgage interest, property tax and gifts to charity, then compare them with the figure for the return you are filing.

Several house costs are never deductible on a personal home. Homeowners insurance, the part of the payment that reduces principal, utilities and depreciation all fall in that group ([IRS Publication 530](https://www.irs.gov/publications/p530)). They become relevant only when part of the home is rented out or used for a business.

| Home cost | Treatment on a personal home | Paper that proves it |
| --- | --- | --- |
| Mortgage interest on up to $750,000 of debt taken after December 15, 2017 ([IRS Publication 936](https://www.irs.gov/publications/p936)) | Deductible if you itemize ([IRS Publication 936](https://www.irs.gov/publications/p936)) | Form 1098, box 1, from each servicer ([Form 1098 instructions](https://www.irs.gov/instructions/i1098)) |
| Property tax on the home | Deductible, inside the state and local tax cap ([Schedule A instructions](https://www.irs.gov/instructions/i1040sca)) | Tax bill, or escrow statement |
| Mortgage insurance premiums | Not deductible for 2025 ([IRS Publication 936](https://www.irs.gov/publications/p936)); treated as interest after 2025 ([26 U.S.C. 163](https://www.law.cornell.edu/uscode/text/26/163)) | Form 1098, box 5 ([Form 1098 instructions](https://www.irs.gov/instructions/i1098)) |
| Home equity loan or line of credit interest | Deductible only if the money bought, built or substantially improved the home ([IRS Publication 936](https://www.irs.gov/publications/p936)) | Loan statement and receipts for the work |
| Homeowners insurance, utilities, principal | Not deductible ([IRS Publication 530](https://www.irs.gov/publications/p530)) | None needed for the return |

## Form 1098 and the escrow statement

Your servicer sends Form 1098 each January. Box 1 is the interest you paid, box 5 holds mortgage insurance premiums and box 6 shows points on a purchase ([Form 1098 instructions](https://www.irs.gov/instructions/i1098)). Box 10 is a free field where some lenders print the real estate taxes or insurance paid from escrow ([Form 1098 instructions](https://www.irs.gov/instructions/i1098)).

An **escrow account** is the lender’s holding account for your property tax and insurance. Your monthly payment feeds it, and the lender pays the bills. The annual escrow statement shows what actually left the account, and that is the tax figure you deduct, not the amount you deposited.

A refinance adds one more paper. Points paid to refinance are usually spread over the life of the new loan ([IRS Publication 936](https://www.irs.gov/publications/p936)). If a loan with spread-out points ends, you can deduct the remaining balance that year, unless you refinanced with the same lender ([IRS Publication 936](https://www.irs.gov/publications/p936)). Keep the closing disclosure of every refinance so the preparer can track it.

## Property tax and the SALT cap

The **SALT cap** is the limit on your deduction for state and local income, sales and property taxes. On a 2025 return the cap is $40,000, or $20,000 if married filing separately, and it shrinks above $500,000 of modified adjusted gross income, never below $10,000 ([Schedule A instructions](https://www.irs.gov/instructions/i1040sca)). On a 2026 return the cap is $40,400, and the shrinking starts above $505,000 ([26 U.S.C. 164(b)(7)](https://www.law.cornell.edu/uscode/text/26/164)). Your property tax shares that cap with state income tax, so a high-tax state can use most of it before the house counts.

Send the bill and the proof of payment, not just one of them. Charges for services on the bill, such as trash pickup, are not taxes and cannot be deducted ([IRS Publication 530](https://www.irs.gov/publications/p530)). Neither can assessments for local benefits like new sidewalks, which raise your basis in the house ([IRS Publication 530](https://www.irs.gov/publications/p530)). The property tax bill guide shows where each line sits.

## Home equity loans and mortgage insurance

A home equity loan or HELOC needs one record that a lender never sends: what the money paid for. Interest is deductible only to the extent the loan bought, built or substantially improved the home that secures it ([IRS Publication 936](https://www.irs.gov/publications/p936)). For example, a kitchen remodel qualifies; paying off a car does not. Keep the contractor invoices with the loan statements.

Mortgage insurance flips between the two years. On a 2025 return, the deduction for premiums has expired ([IRS Publication 936](https://www.irs.gov/publications/p936)). From the 2026 tax year, premiums for qualified mortgage insurance count as home mortgage interest again ([26 U.S.C. 163](https://www.law.cornell.edu/uscode/text/26/163)). Each $1,000 of adjusted gross income over $100,000 cuts the amount by 10% ([26 U.S.C. 163](https://www.law.cornell.edu/uscode/text/26/163)), so a two-earner household may get little of it. Box 5 of Form 1098 is where the premium shows.

## Energy credits on Form 5695: what ended after 2025

Form 5695 carries both home energy credits ([Form 5695 instructions](https://www.irs.gov/instructions/i5695)). A heat pump, new windows or an insulation job had to be in service by December 31, 2025 to earn the home improvement credit ([IRS FAQs on energy credits under P.L. 119-21](https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb)). Solar panels and other clean energy items earn nothing for money spent after that day ([IRS FAQs on energy credits under P.L. 119-21](https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb)). So a 2026 return sees these credits only through a carryforward.

For work finished in 2025, keep the invoice, the date the job was completed and any manufacturer certification. You keep the certification but do not attach it to the return ([Form 5695 instructions](https://www.irs.gov/instructions/i5695)). If a residential clean energy credit was larger than your tax, the unused part carries to 2026 ([Form 5695 instructions](https://www.irs.gov/instructions/i5695)), so last year’s Form 5695 stays in the file.

## Records to keep for the day you sell

When you sell your main home, you may exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly ([IRS Publication 523](https://www.irs.gov/publications/p523)). To qualify for the full amount, you generally must have owned the home and lived in it for at least 24 months out of the 5 years before the sale ([IRS Publication 523](https://www.irs.gov/publications/p523)).

**Adjusted basis** is what you paid for the home, plus improvements and certain other changes, and it is the starting point for the gain. The IRS wants the proof kept for 3 years past the due date of your sale-year return ([IRS Publication 523](https://www.irs.gov/publications/p523)). For an owner of twenty years, that can mean a box of roof, kitchen and addition invoices. If you bought this year, the [purchase-year checklist](/checklists/tax-documents/home-buyers) covers points and the closing disclosure.

1. In January, download every Form 1098, one per loan and servicer.
2. Add the annual escrow statement and any tax bill you paid yourself.
3. For a home equity loan, attach the receipts that show what it paid for.
4. Add 2025 energy invoices and certifications, and last year’s Form 5695.
5. Scan each new improvement invoice into a basis folder that stays with the house, not the tax year.

## Questions people ask

### What tax deductions can homeowners take?

The main ones are home mortgage interest and state and local real estate taxes, and you must itemize on Schedule A to claim them ([IRS Publication 530](https://www.irs.gov/publications/p530)). Insurance, utilities and principal payments are not deductible on a personal home ([IRS Publication 530](https://www.irs.gov/publications/p530)).

### Is home equity loan interest deductible?

Only to the extent the loan money was used to buy, build or substantially improve the home that secures it ([IRS Publication 936](https://www.irs.gov/publications/p936)). Keep invoices that show where the money went.

### Is mortgage insurance deductible?

Premiums you paid in 2025 get nothing; that deduction had lapsed ([IRS Publication 936](https://www.irs.gov/publications/p936)). Premiums paid in 2026 or later count as home mortgage interest again, scaled down when AGI is over $100,000 ([26 U.S.C. 163](https://www.law.cornell.edu/uscode/text/26/163)).

### Are home energy credits still available?

Not for new work. Windows, heat pumps and insulation had to be in service by December 31, 2025, and solar spending had to happen by that date too ([IRS FAQs on energy credits under P.L. 119-21](https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb)). An unused clean energy credit from 2025 can carry to 2026 ([Form 5695 instructions](https://www.irs.gov/instructions/i5695)).

## Sources

- [IRS Publication 530](https://www.irs.gov/publications/p530): Homeowners deduct mortgage interest and real estate taxes only when itemizing; insurance, utilities, principal, service charges and local benefit assessments are not deductible.
- [IRS Publication 936](https://www.irs.gov/publications/p936): The $750,000 debt limit, home equity interest rule, refinance points spread over the loan and deducted when it ends, and the expired 2025 mortgage insurance deduction.
- [Form 1098 instructions](https://www.irs.gov/instructions/i1098): Box 1 interest, box 5 mortgage insurance premiums, box 6 points, and box 10 for other items such as real estate taxes or insurance paid from escrow.
- [Schedule A instructions](https://www.irs.gov/instructions/i1040sca): For 2025, the state and local tax limit is $40,000 ($20,000 married filing separately), reduced above $500,000 of modified AGI but not below $10,000.
- [26 U.S.C. 163](https://www.law.cornell.edu/uscode/text/26/163): Qualified mortgage insurance premiums are treated as interest for tax years beginning after December 31, 2025, phased out above $100,000 of AGI ($50,000 married filing separately).
- [IRS FAQs on energy credits under P.L. 119-21](https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb): The section 25C credit ends for property placed in service after December 31, 2025, and the section 25D credit for expenditures after that date.
- [Form 5695 instructions](https://www.irs.gov/instructions/i5695): Form 5695 figures both residential energy credits; certifications are kept, not attached; an unused residential clean energy credit carries to 2026.
- [IRS Publication 523](https://www.irs.gov/publications/p523): Exclusion of up to $250,000 ($500,000 joint) of gain, the 24-month ownership and use tests, and keeping basis records until 3 years after the due date of the sale-year return.
- [Form 1040 instructions (2025)](https://www.irs.gov/instructions/i1040gi): For 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly.
- [26 U.S.C. 164(b)(7)](https://www.law.cornell.edu/uscode/text/26/164): The state and local tax limit is $40,400 for tax years beginning in 2026, reduced by 30% of modified AGI over $505,000.
- [IRS, 2026 inflation adjustments](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill): For tax year 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.

## More on this topic

- [Form 1098, Mortgage Interest Statement](/documents/1098)
- [Tax deductions for buying a house](/checklists/tax-documents/home-buyers)
- [Tax deductions for rental property](/checklists/tax-documents/rental-property)
- [Tax Deductions for Home Office](/checklists/tax-documents/home-office)
- [How long to keep tax documents](/checklists/tax-documents/how-long-to-keep)

## About the author

Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul).

How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? [Contact us](/contact).

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