What tax deductions can I claim for my newly purchased home?

Thanks for the info! Question about the mortgage interest - does that include the interest portion of my very first payment? My lender said something about interest being paid in arrears and my first payment covering the previous month even though I didn't own the house yet? Also, is there a minimum amount I need to spend on these things to make itemizing worth it vs standard deduction?

Yes, the interest portion of your very first payment is deductible, even if it covers the period before you owned the home. That's just how mortgage interest is calculated - you pay it in arrears (for the previous month), so your first payment includes interest from the time of closing. For itemizing to be worthwhile, your total itemized deductions (mortgage interest, property taxes, charitable contributions, etc.) would need to exceed the standard deduction ($13,850 for single filers, $27,700 for married filing jointly in 2023, and likely higher for 2024/2025). Run both calculations to see which gives you the larger deduction. Many new homeowners find that with substantial mortgage interest and property taxes, itemizing becomes beneficial.

Does it actually work with scanned documents? I have all my closing paperwork but some of it is pretty low quality since I just took pictures with my phone. Can it still read those and identify deductions?

Sounds convenient but I'm wondering if it's just regurgitating basic tax rules you could find anywhere? Like does it actually give you personalized advice or just generic home deduction info? I've been burned by "tax tools" before.

Yes, it works surprisingly well with scanned documents and even phone photos! I uploaded some pretty terrible quality images of my closing disclosure and it still accurately extracted all the key information. It has some pretty advanced document recognition technology that can handle various image qualities. The advice is definitely personalized based on your actual documents, not just generic rules. For example, it identified specific line items from my closing disclosure that qualified for deductions and explained exactly why each item either qualified or didn't qualify based on my particular situation. It went way beyond what I found through generic Google searches or even what my real estate agent told me about tax benefits.

Wait, this actually works? I thought it was impossible to get through to the IRS. How much did they charge you for this "service"? Sounds like something that would cost way more than it's worth.

How is this even possible? I thought the IRS phone system was completely broken. Is this legit or some kind of scam where you're getting connected to fake "IRS agents"? Hard to believe there's a secret backdoor when millions of people can't get through.

Yes, it really works! The service uses a combination of technology and timing to essentially secure a spot in the IRS queue for you, then calls you when an agent is about to be available. I was skeptical too, but it's legitimate - you're connected to the actual IRS phone system, not some third-party pretending to be the IRS. I understand the skepticism completely. I felt the same way initially. It's not a "backdoor" - you're going through the same official IRS phone system everyone else is using, but the service has figured out how to navigate the system efficiently and hold your place in line without you having to listen to hold music for hours. You still talk directly with official IRS representatives who verify your identity just like if you'd called yourself.

How do you document this stuff for the tax credit? I installed a new energy efficient HVAC system but the contractor didn't really give me any special paperwork mentioning energy efficiency ratings or anything. Do I need something specific or just the receipt?

You'll need more than just a basic receipt. For energy efficiency tax credits, you should have a Manufacturer's Certification Statement, which is a document from the manufacturer confirming the product qualifies for the tax credit. It should include the specific energy efficiency metrics. If you don't have this, contact your contractor or the manufacturer directly and request it. You should also keep your receipt showing the purchase date and cost. The IRS doesn't typically require you to submit these documents with your return, but you'll need them if you're ever audited. Form 5695 is where you'll claim residential energy credits on your tax return, and it asks for specific information about each improvement.

I thought the home office deduction was a major audit red flag? My tax guy advised against claiming it even though I legitimately work from home as a freelancer because he said it increases audit risk. Is that still true?

Thanks for this warning! I had no idea there were income limitations on the PMI deduction. My income is around $95,000 so I should be just under the threshold, but it's good to know about the phase-out. Do you know if Congress has approved the PMI deduction for the 2023 tax year (filing in 2024)? And do the same income limits apply to mortgage interest deductions or just PMI?