🚗 🚙 Turn your trusty old car into trustworthy journalism Learn more

Looking for tax breaks in all the wrong places

Nancy Marshall-Genzer Mar 6, 2014

Looking for tax breaks in all the wrong places

Nancy Marshall-Genzer Mar 6, 2014

Rhonda Belluso and her finance, Conor Bambrick,  just bought their first house. It’s a 1929 Tudor, in Albany, New York. They moved in April of 2013 — right around tax time.

“Taxes were on my mind at that point.  They always are,” Rhonda Belluso says, laughing.

Since Belluso was already thinking about taxes, we thought she wouldn’t mind a little tax quiz: 

First question:  Is there any kind of national tax credit for first-time homebuyers? 

Bellusco doesn’t think so.

“I know there was an $8,000 credit at the time, but I was pretty sure that had gone away,” she says.

I run Belluso’s answer by Leonard Wright, a CPA in San Diego, who says that she’s right. 

Wright says President Barack Obama included a new homebuyer tax credit in his stimulus package during the housing crisis.  But it expired in 2010.  Wright says the state or city you live in might offer a credit, though. 

The second question: Is the interest she pays on her mortgage deductible?

“I think so,” Bellusco says, haltingly.

Belluso’s right again – although she’s not sure if she deducts every penny she pays in interest, or just a percentage of it.  

Wright says, “The answer is generally it is dollar-for-dollar up to $1 million of mortgage that you have on your home.”

Third question: Does she get tax credits for making energy-saving improvements to her home?

Belluso doesn’t get everything right.  

“New windows, some sealed doors, so hopefully some of those will come off for next year,” she says.

Nope. That energy-saving tax credit expired at the end of last year.  Congress could renew it, but hasn’t so far.    

Now, Belluso doesn’t have a second home.  But if you do, you might be sitting on more deductions. Even if that “second home” is an RV or a boat. 

“It’s basically as long as you have cooking and bathroom facilities, then it can be a second home,” says Kay Bell of Bankrate.com.

Also, you have to live in your second home at least two weeks a year.

And if you sold a house in 2013?   You can get some deductions, too.  For things like advertising.  And certain renovations done close to the sale.

Five tax tips for homeowners:

  1. You can deduct every dollar of interest:   You can deduct every penny you pay in interest – not just a percentage.  One caveat:  you can’t deduct interest if your loan is more than $1 million. 
  2. You can deduct points:  If you paid points to get a better rate on any kind of home loan, you should be able to deduct them. The IRS lets you deduct points in the year you paid them.  You may also be able to deduct points on a refinanced loan.
  3. Some taxes are deductible:  You can deduct the property taxes you pay to your city or state on your federal tax return.
  4. Interest on a loan for a second home may be deductible:  That could include an RV or a boat, according to Kay Bell of Bankrate.com.  She says the interest is deductible as long as they have cooking, sleeping and bathroom facilities.  Also, you need to live in your second home at least two weeks per year.
  5. You can get tax breaks if you sell your home:  You can deduct advertising and marketing costs, and some repairs if they’re made close to the sale.


There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.