Tax Season 2026: What Homeowners Need To Know

We're in the midst of it again. Tax season.

The stress is real every year, but if you own a home, you can make your 2025 filing a lot easier and more manageable by starting to prepare today. The deadline for most filers is April 15, 2026, so avoid any last-minute hiccups by getting ahead of it now.

Let’s walk through what’s new, what still applies, and how to set yourself up for a smooth filing season.

Update Your Personal Information First

Before you dig into deductions, take a few minutes to make sure the basics are in order. If you moved into a new home, recently married, divorced, or changed your name, the IRS and Social Security Administration (SSA) need to have your current information on file.

The IRS notes that if the name on your tax return doesn’t match SSA records, it can delay the processing of your return. You can report a new address when you file, but updating the IRS beforehand means you won’t miss any important correspondence in the meantime.

The five categories are Single, Head of Household, Married Filing Jointly, Married Filing Separately, and Qualifying Surviving Spouse. Life changes quickly, and your status from last year may not be the right one for 2025.

Itemize or Take the Standard Deduction?

This is the central question every homeowner has to answer. For 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly.

Most homeowner deductions only come into play if you itemizeTo list each eligible deduction separately, such as mortgage interest, property taxes, and charitable donations, instead of taking the standard deduction in order to potentially reduce your taxable income.itemizeTo list each eligible deduction separately, such as mortgage interest, property taxes, and charitable donations, instead of taking the standard deduction in order to potentially reduce your taxable income., so it’s worth doing the math to see which approach puts more money back in your pocket.

But here is one encouraging part: several changes signed into law in July 2025 with retroactive effect to January 1, 2025, make itemizing more worthwhile for homeowners than it’s been in a long time.

Key Homeowner Deductions for 2025

Mortgage Interest

Most often, this is the largest deduction available to homeowners who itemize. You can deduct the interest paid on up to $750,000 of mortgage debt (or $375,000 if married filing separately) for loans originated after December 15, 2017. If your mortgage predates that, the limit may be higher. Your lender has sent, or will send, you Form 1098, which shows the total interest you paid in 2025 and is required if that amount is $600 or more.

SALT Deduction Cap Expanded

The State and Local Tax (SALT) deduction cap jumped from $10,000 to $40,000 this year, and it will increase by 1% annually all the way through 2029. This is a significant win for homeowners in states with higher property taxes (we’re looking at you, CT, IL, and NJ).

Keep in mind this is a combined cap covering state income taxes, real estate taxes, and personal property taxes. It’s not a $40,000 credit in addition to other deductions.

Home Equity Loan and HELOC Interest

If you tapped your home equity through a loan or line of creditA HELOC, or Home Equity Line of Credit, is a revolving line of credit that lets you borrow against your home’s equity, withdraw funds as needed during a set period, and repay over time.a loan or line of creditA HELOC, or Home Equity Line of Credit, is a revolving line of credit that lets you borrow against your home’s equity, withdraw funds as needed during a set period, and repay over time., you may be able to deduct the interest, but only if the funds were used for qualifying home improvements. Using a HELOC to remodel a kitchen? That likely qualifies. Using it to consolidate personal debt? It does not.

Home Office (Self-Employed Only)

If you’re self-employed and work from home, a portion of your mortgage interest, utilities, and property taxes may be deductible as business expenses. However, if you are a W-2 employee working remotely, this deduction does not apply to you under current tax law.

Act Now on Energy Efficiency Credits

Now here is one that requires your immediate attention: federal deductions for energy efficiency improvements have been eliminated. If you installed solar panels, upgraded windows or doors, or made other qualifying green improvements before December 31, 2025, you can still claim those credits this filing season.

Expert Tip

Have Form 1098 handy when you sit down to file. Your lender is required to send it if you paid $600 or more in mortgage interest in 2025, and it’s the key document for claiming your mortgage interest deduction. If you purchased your home in 2025, also hold onto your closing disclosure, as it shows the property taxes you paid at closing, which you can deduct separately from what the seller paid.

Documents to Gather Before You File

Round up these records before you sit down to file:

1. Form 1098 from your mortgage lender showing interest paid

2. Property tax payment records and bills

3. PMI statements (if applicable)

4. HELOC or home equity loan statements if used for home improvements

5. Receipts for energy efficiency upgrades completed in 2025

6. Closing disclosure if you purchased a home in 2025

7. Records of charitable donations, business expenses (if self-employed), and retirement contributions

8. W-2s, 1099s, and any other income documents

Check Your Withholdings

Buying a home really does change your tax picture drastically. If you moved into a new home in 2025 and haven’t updated your W-4 with your employer, now is a good time. Withholding too little means a surprise tax bill in April. Withholding too much means you’ve been giving the government an interest-free loan all year. The goal is to land as close to even as possible.

Should You Work with a Tax Professional?

As is the case so often, the answer is: it depends.

For homeowners with straightforward situations, filing independently with a reputable software program is often perfectly sufficient. But if you purchased or sold a home in 2025, are self-employed, own rental properties, or have a more complex financial picture, the guidance of a licensed CPA or tax preparer can more than pay for itself.

If cost is a concern, the IRS Free File program and Volunteer Income Tax Assistance (VITA) offer free preparation services for qualifying taxpayers.

Finally Put the Bow on 2025, Homeowner

Filing season doesn’t have to be stressful. Start gathering your documents early, take a close look at whether itemizing makes sense with the updated deductions available to you this year, and don’t wait until mid-April to dig in.

While members of our team here at Atlantic Bay are not licensed tax professionals, we are always happy to help you understand your Form 1098 or answer questions about your mortgage. Reach out to your Atlantic Bay Mortgage Banker at any time of the year!