Tax season is upon us and homeowners are reminded about changes to the tax code that went into effect in 2018. Despite the changes, homeowners still have many advantages in the tax code.


Homeowners who itemize can still deduct 100 percent of their mortgage interest payments on a first and second home, up to a maximum mortgage amount of $750,000 for loan balances taken after December 16, 2017 (the limit remains $1 million for mortgages that were established prior to that date as well as loans under contract before December 15, 2017, subject to certain rules).


Taxpayers also can deduct up to $10,000 of state and local taxes, including property taxes and income or sales taxes. Plus, taxpayers can deduct interest on a home equity loan or home equity line of credit if the loan is used for substantial home improvements.


When you decide to sell your home, homeowners who have owned and occupied their principal residence for at least two of the past five years do not have to pay capital gains tax on profits from the sale ($500,000 for married couples and $250,000 for single filers).


Mortgage insurance premiums offer another potential deduction. Generally, people who purchase a home with less than a 20 percent down payment must buy mortgage insurance, and those premiums also can be deducted.


Buying and owning a home can offer significant tax savings. Many home owners rely on these benefits to help offset the costs of homeownership, while prospective buyers take them into consideration as an advantage over renting.


It’s important to keep in mind that the tax lawdid create important changes that could impact you. You should always consult a qualified professional adviser for questions about filing your tax returns and this article is for information only.In addition, you can visit and read IRS Publication 936 for more information about the recent tax law changes.