For Federal income tax purposes, which costs of homeownership may be deducted from gross income?

When it comes to federal income tax, homeowners can deduct certain costs associated with homeownership to reduce their taxable income. Mortgage loan interest and local property taxes are significant deductions available to homeowners.

The interest paid on a mortgage for a primary residence is typically the largest tax deduction a homeowner can claim. This allows homeowners to deduct the interest they pay on loans used to buy, build, or improve their homes. Similarly, local property taxes, which are assessed by municipalities and based on property value, can also be deducted. This provides homeowners the opportunity to lower their tax liabilities, making homeownership more financially accessible.

Other options, such as homeowner association fees, maintenance costs, utilities, insurance, and home renovation expenses, do not qualify for deductions. Homeowners can benefit significantly from the deductions available for mortgage interest and property taxes, making this option the most appropriate choice.