Which TurboTax Does a Homeowner Need?
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Buying a home shakes up your tax picture because it opens the door to itemized deductions. Mortgage interest, property taxes, and sometimes points you paid at closing can add up to more than the standard deduction, and that's when itemizing makes sense. Your lender sends you a Form 1098 each year showing the mortgage interest you paid, and your property tax records fill in the rest.
Not every homeowner ends up itemizing, since the standard deduction is generous and the deduction for state and local taxes is capped. The smart move is to enter your numbers and let the software compare itemizing against the standard deduction for you. Either way, owning a home usually means stepping up from the most basic edition.
TurboTax Deluxe (Online)
Deluxe is built with homeowners in mind. It walks you through mortgage interest, property taxes, and other itemized deductions, then automatically compares itemizing to the standard deduction so you take whichever saves you more. It also runs a broader deduction and credit search than Free Edition. For most homeowners without investments or self-employment, Deluxe is the sweet spot.
Alternatives to consider
Itemizing versus the standard deduction
Itemizing only helps if your total deductions beat the standard deduction. The biggest pieces for homeowners are mortgage interest and the deduction for state and local taxes, which includes property tax but is capped. Enter everything and let TurboTax do the comparison. If the standard deduction wins, that's perfectly fine, you still claim it and you didn't miss a thing by checking.
Home improvement and energy credits
Certain energy-efficient upgrades, like qualifying solar, heat pumps, or insulation, can earn you a tax credit, which is even better than a deduction because it cuts your tax directly. Hang on to receipts and manufacturer certifications. Deluxe walks you through the energy credit questions and reports them on the right form.
Frequently asked questions
I just bought my first home. Is Deluxe worth it?＋
Often, yes. Even if you end up taking the standard deduction this year, Deluxe makes sure you check every homeowner deduction and credit, and it handles the comparison automatically.
Can I deduct all of my property taxes?＋
The deduction for combined state and local taxes, including property tax, is capped. TurboTax applies the limit for you, so you don't have to keep track of the cap yourself.
I refinanced this year. Does that matter?＋
It can. Points paid on a refinance are often deducted over the life of the loan, and your interest may be split across two lenders. Deluxe walks you through entering both 1098 forms.
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