Buying a house is exciting, and as a new homeowner you’re likely busy decorating and getting settled. Amid all the fun, don’t forget about a few important tax-related action items. Taking some simple steps now can save you money and headaches later. In this friendly guide, we’ll walk you through practical tax tasks to handle after buying a home – from updating your info and organizing paperwork to understanding homeowner tax breaks. We’ll keep things approachable and jargon-free, with real examples, so you can make the most of those homeowner tax benefits.

1. Update Your Address with the IRS and Everyone Else

After moving in, be sure to update your address everywhere it matters. This includes notifying the IRS (you can file Form 8822 for an address change) and updating your address with your employer for W-2s and any financial institutions. A current address on file ensures you receive all tax documents (like your mortgage statements) on time. Next, consider adjusting your tax withholding at work if homeownership will significantly change your tax situation. For example, if your new mortgage interest and property taxes mean you’ll itemize deductions and owe less tax, you could file a new W-4 to have a bit less withheld from your paycheck. This way, you get the benefit of your home’s tax breaks throughout the year rather than waiting for a refund.

Create a “home binder” (or digital folder) to keep all your important house-related documents organized. Having everything in one place will make tax time much easier. In your home binder, include:

• Closing and purchase papers: Your purchase contract, closing disclosure, and settlement statements (these show expenses like property taxes paid at closing and any points you paid). The IRS advises keeping these as part of your tax records​.
• Mortgage and loan documents: Your loan agreement and Form 1098 (which your lender will send you each January showing the mortgage interest you paid).
• Property tax statements: Bills or receipts for property taxes paid. If you pay through escrow, your lender might provide an annual summary.
• Home improvement receipts: Keep receipts for any improvements or energy-efficient upgrades you make. These can support claims for energy credits now and increase your cost basis for potential tax benefits when you sell​.
• Insurance and warranties: It’s not tax-related, but also file away your homeowners insurance policy, title insurance, and any home warranty info for easy access.

Good records help ensure you don’t miss out on deductions or credits and substantiate them if needed. Plus, if you ever sell your home, you’ll have documentation of your purchase price and improvement costs ready to determine any taxable gain. Think of your home binder as a gift to your future self come tax season!

2. Understand Your New Deductions (Mortgage Interest & Property Taxes)

One of the biggest financial perks of homeownership is that many of your home-related expenses may be tax-deductible. The two major deductions new homeowners can typically benefit from are mortgage interest and property taxes. To take advantage of these, you’ll need to itemize your deductions on your tax return (instead of taking the standard deduction)​. Itemizing is worthwhile only if all your deductible expenses add up to more than the standard deduction (which for 2025 is $30,000 for a married couple filing jointly, and $15,000 for a single filer​). If your home costs plus other deductions (like charitable gifts or state income taxes) exceed that amount, itemizing can lower your taxable income.

Mortgage Interest Deduction: Each mortgage payment you make includes interest charged by your lender. Especially in the early years of a home loan, the interest portion of payments is large. The good news is that interest is generally tax-deductible. You can deduct interest on mortgage debt up to $750,000 if you bought the home after 2017. Your lender will send you Form 1098 after year-end showing how much interest you paid. For example, if you paid $10,000 in mortgage interest this year and you’re in the 22% tax bracket, that’s up to $2,200 in potential federal tax savings. Realistically, the exact benefit depends on your overall tax picture, but it’s a significant break. Tip: If you paid “points” (prepaid interest to get a lower rate) as part of your closing, those points may also be deductible as mortgage interest – sometimes all at once in the year of purchase, if certain conditions are met. Check your closing statement for any points paid and give that info to your tax preparer.

Property Tax Deduction (SALT): Owners of real estate pay property taxes to their city or county, often bundled into your monthly mortgage escrow. These property taxes are deductible too – but there’s a cap. Under current tax law, the deduction for State and Local Taxes (SALT) (which includes property taxes and state income or sales taxes combined) is limited to $10,000 per year​. In practical terms, if you paid $4,000 in property tax and $6,000 in state income tax, you can deduct $10,000 of that total. If you’re married filing separately, the cap is $5,000 each. Keep an eye on your property tax bills and any prorated taxes you paid at closing, which would be on your settlement sheet. Even though the SALT deduction is capped, be sure to document everything you paid – every bit helps, and rules can always change down the road.

Between mortgage interest and property taxes, many first-time homeowners find they have a larger deduction total than before. If your deductible home expenses (plus other itemized items) exceed the standard deduction, you’ll itemize and see tax savings from your home. If not, you’ll simply take the standard deduction – but still keep those records! You might be surprised in future years, especially as interest can vary and tax laws evolve. And even if you don’t itemize, some states allow deductions or credits for property taxes or mortgage interest on the state return, so good documentation is key.

3. First-Time Homebuyer Credits and Programs

If this is your first home purchase, you may be wondering about special first-time homebuyer tax credits.

• Mortgage Interest Credit (MCC Program): This is a lesser-known break that can put money back in your pocket each year if you qualify. It’s not new, but many first-time buyers miss it. Certain state or local housing agencies offer a Mortgage Credit Certificate (MCC) to first-time buyers (generally those with moderate incomes). If you have an MCC, you can claim a Mortgage Interest Credit on your tax return. This credit is a percentage of the mortgage interest you pay (often 20% of the interest, depending on the program). It directly reduces your tax bill, unlike a deduction. You still deduct the remaining interest as usual. Those who receive a qualified MCC with their mortgage can claim this credit each year​. To do so, you’ll file Form 8396 (Mortgage Interest Credit) – and if you refinance later, keep your old MCC records too. Not every loan comes with an MCC; it’s something you would’ve applied for when getting your mortgage (often through first-time buyer programs). If you’re not sure, dig through your closing packet or ask your lender. It can be worth up to $2,000 per year in credits (the IRS caps the credit at $2K annually in many cases).
• State and Local First-Time Buyer Incentives: While the federal first-time buyer credit has sunset, some states or cities offer tax credits or property tax reductions for new homeowners or resident first-time buyers. For instance, some places have a one-time credit on your state return, or a reduction in property tax for owner-occupants. These programs vary widely, so check your state’s revenue department or local housing agency website. They might not be automatic – you may need to apply or file a form to claim them. We can help you identify any local tax breaks you’re entitled to as a new homeowner.
• IRA Withdrawal Benefit: (This isn’t a credit, but worth a mention.) If you pulled from an IRA for your down payment, remember that up to $10,000 withdrawn from an IRA for a first home purchase is penalty-free. You’ll still pay income tax on a traditional IRA withdrawal, but you avoid the 10% early withdrawal penalty if the funds went toward your home. Be sure to keep documentation of how the money was used, in case of any questions.

If you think you might qualify or did receive some first-time homebuyer assistance, that’s a perfect reason to consult with a tax professional (we’re happy to help!) to make sure you’re taking advantage of everything available.

4. Energy Efficiency Credits for Upgrading Your Home

Homeownership often comes with a desire to make improvements – and if you do, there are tax credits for certain energy-efficient upgrades.

• Energy Efficient Home Improvement Credit (EEHIC): This credit is aimed at typical efficiency upgrades. If you install new insulation, energy-efficient windows or exterior doors, upgraded HVAC systems (like a modern furnace, central AC), water heaters, or conduct a home energy audit, you can get a tax credit worth 30% of the cost of those improvements. There is a yearly limit – you can claim up to $1,200 per year for this category of improvements, with sub-limits like a $600 max for windows, $500 for doors, etc.​. Notably, if you install certain big-ticket items like an efficient heat pump, heat pump water heater, or biomass stove, there’s an additional $2,000 credit allowance for those, on top of the $1,200 limit. In total, you could potentially get up to $3,200 back in credits per year if you did a comprehensive energy makeover. And these credits refresh each year through 2032 – meaning if you spread projects over several years, you can claim up to the max each year​. Be sure to save all manufacturer certification statements and receipts – you’ll need details to claim the credit and prove the equipment qualifies. We can help you navigate Form 5695 which is used for these residential energy credits.
• Residential Clean Energy Credit: This one is for the big renewable installations – think solar panels on your roof, solar water heaters, geothermal heat pumps, small wind turbines, or battery storage systems. This credit is also 30% of the cost and, unlike the above, has no dollar cap per year​. So if you spend $20,000 on a solar panel system, you could get a $6,000 credit, regardless of the amount. The 30% rate is locked in through 2032 (drops slightly to 26% for 2033 and 22% for 2034)​. Many new homeowners start thinking about solar or other clean energy upgrades, and this credit makes the math much more favorable. Again, good records are essential – keep contracts and receipts, and make sure the systems you install meet the required qualifications (usually any reputable installer will confirm if their product qualifies for the federal credit).

Feel free to reach out to us for guidance on what improvements qualify and how to claim these credits – we’re nerds about this stuff so you don’t have to be!

5. Stay Organized and Ask for Help

Becoming a homeowner comes with a learning curve, but you’re not alone. The key takeaways are: keep good records, be aware of your deductions and credits, and don’t be afraid to ask questions. Set up that house binder (or digital file system) to organize everything – it truly pays off when it’s time to do your taxes. A little prep now (like tracking mortgage interest, property tax, and improvement expenses) will make tax season much less stressful. And remember, tax rules can change, so what might not help you this year (like falling short of the standard deduction) could help next year – which is why holding onto documents is important.

Most importantly, know that professional guidance is available. Taxes can feel overwhelming, especially with a big life change like a home purchase. Our firm is here to help you navigate the tax benefits of homeownership and any other financial questions you have. We pride ourselves on being friendly and approachable – no question is too basic. So, if you’re unsure about something or want personalized advice tailored to your situation, please reach out to us. We can help you make a plan, whether it’s adjusting your withholding, maximizing your deductions, or planning future home improvements in a tax-savvy way. Feel free to give us a call or email – we’re here to ensure you get all the tax benefits you’re entitled to and keep your financial life as sweet as your new home. Welcome to homeownership, and we look forward to being your trusted advisor on this journey!

• _{IRS Tax Tip – Tax benefits for homeowners ​content.govdelivery.com​content.govdelivery.com}
• _{IRS Publication 936 – Home Mortgage Interest Deduction (2024) ​irs.gov}
• _{NerdWallet – Tax Deductions for Homeowners in 2025​ nerdwallet.com}
• _{IRS – Home Energy Tax Credits (Inflation Reduction Act) ​irs.gov​irs.gov}
• _{IRS Publication 530 – Tax Information for Homeowners (records to keep) ​irs.gov}