Homeownership creates tax‑saving opportunities that many people overlook because they do not track the right transactions throughout the year. Your bank statements already contain the evidence for mortgage interest, property taxes, home office costs, and more. The hard part is pulling it together in a way that matches what the IRS expects.
Note: We are not CPAs or tax professionals. Find Your Deductions helps you categorize transactions and identify potential deductions to save time and money, but you should always consult a qualified tax professional for advice specific to your situation.
How homeowner deductions work
Not every housing expense is deductible, but if you itemize rather than take the standard deduction, several key costs usually qualify.
Mortgage interest is the interest portion of your monthly payment to the lender. Your servicer sends Form 1098 each January showing the total, but matching it to your bank records ensures nothing was missed or duplicated.
Property taxes paid to your county or municipality count, whether you pay directly or through escrow. If you pay directly, the transaction often includes "tax" or "treasurer" in the description. If you pay through escrow, your year‑end statement breaks out how much the servicer forwarded on your behalf.
Home office deductions apply if you use a space regularly and exclusively for business. You can deduct a portion of mortgage interest, property taxes, utilities, insurance, and repairs tied to that space. Choose either the simplified method (rate times square footage) or the actual expense method (percentage of total housing costs). For utilities, track the business share of electricity, internet, and heat.
Points or origination fees paid when you bought or refinanced can sometimes be deducted in the year paid or spread over the life of the loan, depending on the loan type and purpose. Check your closing disclosure for the exact amount and timing.
Medically necessary improvements like ramps, grab bars, or widened doorways may qualify as medical deductions rather than home deductions, but they still show up in your transaction history. Keep the contractor invoice and a note explaining the medical purpose.
What does not count
Knowing what to skip saves time and avoids trouble:
HOA fees, home insurance (unless part of a home office calculation), routine repairs and maintenance, principal payments on your mortgage, and utilities for personal use do not qualify. The IRS draws a line between costs that maintain the home and costs required by law or tied to business use.
What your bank data shows
Your checking account and credit card statements already contain most of the proof you need.
Mortgage servicer transactions show up monthly with the lender's name — Rocket Mortgage, Mr. Cooper, Wells Fargo, or a similar company. Part of that payment is interest (deductible) and part is principal (not deductible). Your Form 1098 breaks this down, but matching it to your bank records catches errors or double payments.
Property tax payments appear as ACH debits or checks to your county treasurer if you pay directly, or they are bundled into your mortgage escrow and forwarded on your behalf. If you pay directly, the transaction description often includes "tax" or "treasurer." If you use escrow, your year‑end servicer statement shows the total forwarded.
Home office utilities like electricity, internet, and heat become partially deductible when you allocate a business percentage. Tag these recurring bills and apply the same percentage each month. Take two photos of your office space and write down the measurements once a year so you can justify the split.
Closing costs paid at purchase or refinance, including points and prepaid interest, show as large one‑time transactions on your settlement statement. Upload your closing disclosure CSV or attach a PDF so the timing and amounts are clear.
A simple tracking routine
Map common mortgage servicers so monthly payments land in the right category. Tag your county tax office or mark escrow transactions. If you have a qualifying home office, set a business percentage for utilities and apply it consistently.
Each quarter, confirm your mortgage and property tax totals match your Form 1098 preview or escrow statement. In December, take fresh photos of your office, confirm square footage, and download your final servicer statements so everything is ready when forms arrive in January.
Find Your Deductions uses confidence scores to show where you have complete evidence. A mortgage payment matched to your Form 1098 yields high confidence. A utility bill with a documented business percentage and photos of your office does the same.
Documentation that works
Each deduction should have a clear record that ties the expense to IRS requirements.
For mortgage interest, keep your Form 1098 from the lender plus bank records showing each payment. If the numbers do not match, note why — servicer errors happen, and prepayments or refinances can create discrepancies.
For property taxes, save tax bills or escrow statements matched to your bank transactions. If you made a direct supplemental payment in addition to escrow, document both so you do not double‑count.
For a home office, take two photos of the space each year and write down square footage. If using the actual expense method, keep utility bills and calculate the business percentage. If using the simplified method, just record the square footage and rate.
For points and closing costs, attach your closing disclosure or settlement statement showing what was paid and when. If points are being amortized, track the schedule so you claim the right amount each year.
For medically necessary improvements, keep contractor invoices and a short note explaining the medical purpose. This helps distinguish the expense from a general repair.
Pitfalls to avoid
State and local taxes, including property taxes, are capped at $10,000 for most filers. This limit can reduce the benefit of itemizing, so compare your total itemized deductions to the standard deduction before assuming itemizing makes sense.
Do not deduct a percentage of utilities for a home office and also claim them as personal medical expenses or anywhere else. Pick one category.
Prepaying property taxes or points affects which year you claim the deduction. Check current IRS guidance if you are planning a large prepayment near year‑end.
Some homeowners pay property taxes through escrow and also make direct supplemental payments. Make sure you are not counting the same bill twice.
Do not claim 100 percent business use for a home office unless the space truly is used exclusively for business. Mixed use does not qualify.
Where the product fits
Connect your checking account and credit card, and Find Your Deductions will identify transactions from your mortgage servicer, county tax office, and utility providers. Set a home office percentage once and the system applies it to every eligible bill. When your Form 1098 arrives, you already have a matching record in your dashboard.
For deeper topics, see the medical deductions guide for health‑related improvements and the freelancer guide for home office deep dives.
Bottom line
Your bank data already contains most of the evidence you need to claim homeowner deductions. The challenge is pulling it together throughout the year in a way that matches IRS documentation requirements. Build a consistent tracking routine and you will capture mortgage interest, property taxes, home office expenses, and more without the April scramble.