Homeownership tax breaks to take in December

December 18, 2013

Is there any popular holiday tune more beloved than The Christmas Song?

Its title alone — THE Christmas Song, not just A Christmas Song or Some Christmas Song — gives it predominance in the Christmas carol collection.

And the prominence is well deserved, especially Nat King Cole's rendition of Mel Torme's classic. It is simply superb.

Cole's inimitable voice makes this the quintessential Christmas at home song. We've got a roaring fireplace (mmm, toasty chestnuts!), mom and dad snuggling (remember the mistletoe mention) and the kiddos finally settled in for the night awaiting St. Nick and his flying reindeer.

All these home and hearth musical images naturally got my tax mind wandering to homeownership tax breaks. And that earned The Christmas Song, with all the homey images it conjures, spot number seven on the 2013 Christmas Tax Tip Tunes playlist.

Homeownership's many tax benefits: Owning a residence is a major accomplishment for many folks. It's also a major expense. But the tax code offers home owners some help in covering those costs.

The obvious tax help is the deduction of mortgage interest and property tax payments.

Interest paid on many home equity loans or lines of credit also is deductible.

If you paid points for your home loan, or even points in connection with a mortgage refinancing, you can deduct those, too.

Some homeowners can even deduct the private mortgage insurance, or PMI, they pay on their house loans.

Improvements you make to your home can increase its basis, that it, its value, and that will help reduce your sale profit for tax paying purposes. Or in some cases, might qualify as immediate deductions if they're made for legitimate medical reasons.

December homeowner tax focus: When the end of the year rolls around, home owners should pay special attention to two of their residential tax breaks, the mortgage interest and property tax deductions.

If you pay these amounts by Dec. 31, you can deduct them as itemized expenses on the Schedule A you file with your coming Form 1040.

Take care, though, that you won't face the alternative minimum tax. This parallel tax system, known as the AMT, was devised in 1969 to guarantee that wealthy filers paid their fair share to the IRS. Under the AMT, some usually acceptable tax breaks aren't allowed.

You can still write off your mortgage interest, but real estate and personal property taxes aren't deductible under the AMT. So run the numbers.

If you won't face the AMT and paying these two home-related items will cut your coming tax bill, then write the checks by Dec. 31.

You also might find these items of interest:

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
The latest Dirty Dozen tax scam list is familiar because too many are still falling for the schemes

March 5, 2026

Tax filing season is also peak time for tax scams. Be on the lookout for…

Read More
Hello Tax Season 2026

Happy New Tax Year! Are you ready to file your 2025 tax return? I know, too early to ask. But Tax Day 2026 will be here before we realize it. The Internal Revenue Service deadline to file and pay any tax we owe is the regular April 15 date this year. It’s also Tax Day for most of the states that collect income taxes from their residents, which is most of the states! If that seems too far away right now, don’t worry. As is the case every tax season, the ol’ blog’s tips and other tax reminders should help all of us meet our state and federal responsibilities. Procrastinators also will want to keep an eye on the countdown clock just below. It tracks how much time we have until April’s Tax Day, just in case we put off our annual tax task until the absolutely final hours and decide we need to instead get an extension request into the IRS by that date. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Such a lovely song! You are absolutely right that owning a residence is a major accomplishment for many folks and a major expense. When the end of the year rolls around we should pay our mortgage payments in the first place and only then buy presents for family, home decorations and so on. One extra payment per year over the duration of your mortgage lifespan will reduce your mortgage amortization by years, which means you will pay less interest in the long run. Of course everything depends on how many years you need to pay and the percentage of your mortgage. This year my husband decided to make me a Christmas present beforehand and to buy our first nest, our first family house. I know, we saved for so long to buy it, but when you finally buy it and enter your own house, it’s an incredible feeling! He found it with his friend at localmartca.com as then he explained to me. I’m so happy to have such a present for Christmas!

Leave your comment