Year-End Tax QuestionsFor Florida Homeowners

The original version of this article listed ten year-end tax moves for homeowners. Several of them were never quite right, and federal tax legislation passed in July 2025 made two of them flatly wrong. It has been rewritten from the current rules.

That is worth saying plainly, because the old version of this advice is still circulating on a great many real estate websites.

Start here: do you even itemize?

For tax year 2026 the standard deduction is $32,200 for married filing jointly, $16,100 single, and $24,150 head of household. A great many Florida homeowners — particularly those who have owned for a while, have a modest remaining mortgage balance, and live in a state with no income tax to deduct — do not clear that bar.

That is the first question to answer, before any of the rest of this matters.

Property taxes and the SALT cap

State and local taxes, including Florida property taxes, are deductible — subject to a cap that has moved twice recently.

There is an income phase-out. The cap is reduced by 30% of modified AGI above the threshold — $505,000 for 2026 — with a floor of $10,000. So a high earner is effectively back at the old cap.

Mortgage interest

Deductible on acquisition debt up to $750,000 ($375,000 married filing separately) for debt incurred after 15 December 2017. Older debt is grandfathered at $1,000,000 ($500,000 MFS).

The change worth noting is that the $750,000 limit, which had been scheduled to sunset after 2025, is now permanent.

The energy efficiency credits are gone

This is the single biggest correction to the original article, which told readers that eco-friendly home improvements "could" earn green tax credits. For 2026 they do not.

Note the two provisions use different tests — 25C turns on when the property was placed in service, 25D on when the expenditure was made. If you had work in progress across the 2025 year-end boundary, that distinction is worth a conversation with your preparer.

There is still a state-level benefit in Florida that has nothing to do with income tax: the home-hardening sales tax exemption for impact-resistant windows, doors and garage doors was extended through 30 June 2029, with refunds capped at $500 per homestead property.

Home office

If you are a W-2 employee working from home: no deduction. The 2017 tax act suspended miscellaneous itemized deductions; the 2025 act eliminated them permanently effective 2026. The IRS's own guidance is unambiguous on this.

If you are self-employed — a contractor, a sole proprietor, an agent — the deduction remains available, on Form 8829 or the simplified $5-per-square-foot method, subject to the regular-and-exclusive-use test.

The original article framed this as a benefit for "remote workers." For the large number of people who relocated to Central Florida to work remotely for an out-of-state employer, that framing was misleading then and is wrong now.

Points, refinancing and home equity

Points on a purchase. Points paid to buy or build a main home can generally be deducted in full in the year paid, if the conditions in IRS Publication 936 are met.

Points on a refinance. Generally not deductible in full in the year paid — they must be amortized over the life of the loan. The exception is the portion of the proceeds used to substantially improve the main home. One useful detail: if a prior refinance left unamortized points and that loan is paid off by a new refinance, the remaining balance is generally deductible in the payoff year.

Other refinancing costs. The original article said "some associated costs could be deductible," which is too vague to act on. In fact, appraisal fees, title insurance, credit report fees, recording fees, attorney fees and loan origination administrative charges are not deductible on a refinance, and are not added to basis either.

Home equity loans and HELOCs. The rule is narrower than "home improvement loan interest might be deductible":

A HELOC that paid for a kitchen remodel: interest generally deductible, within the aggregate acquisition-debt limit. A HELOC that consolidated credit cards, bought a car or paid tuition: not deductible. This suspension is now permanent.

"Prepaid interest." The original article suggested prepaying mortgage interest as a year-end move. That is not how it works — if you pay interest in advance for a period beyond the end of the tax year, you must spread it over the years to which it applies. The only real exception is qualifying points on a purchase. The legitimate year-end move is narrower: making your 1 January payment in December, because that payment covers December interest that has already accrued.

If you sold: the capital gains exclusion

$250,000 single, $500,000 married filing jointly, on the gain from the sale of a principal residence. You must have owned the home for at least 24 months of the last five years, and used it as your principal residence for at least 24 months of the last five years.

The number worth sitting with: it has never been indexed for inflation. It was set by the Taxpayer Relief Act of 1997 and has not moved since. The 2025 legislation did not touch it.

That matters more here every year. The Orlando metro's median owner-occupied home value was $409,400 in the 2024 American Community Survey. A single filer who bought two decades ago and has maintained the home can reach the $250,000 cap without owning anything anyone would call a mansion.

Two bills in the current Congress would change this — the More Homes on the Market Act, which would double and index the amounts, and H.R. 4327, which would eliminate the tax on primary-residence gain entirely. Neither has been enacted. Plan around the law as it is.

If you own a rental

Ordinary and necessary expenses — maintenance, insurance, management, repairs — remain deductible against rental income, as always.

The change worth knowing: 100% bonus depreciation was restored permanently for most qualified property with a class life of 20 years or less, acquired after 19 January 2025. Property under a written binding contract entered into before 20 January 2025 does not qualify.

Practically, this is what makes a cost segregation study worth considering again on a rental — appliances, flooring, land improvements and site work can be accelerated. The 27.5-year building shell itself is still not bonus-eligible.

Two things that are new for 2026

Mortgage insurance premiums are deductible again. The 2025 legislation restored the treatment of qualified mortgage insurance premiums — PMI, FHA, VA and RHS — as qualified residence interest, for premiums paid or accrued after 31 December 2025.

Two significant caveats. The phase-out is steep and is not inflation-adjusted: the deduction is reduced by 10% for each $1,000 (or fraction) of AGI over $100,000, which means it is fully gone somewhere around $110,000 of AGI. And — being straight with you — when we checked the underlying statutory text, it still displayed the pre-2025 termination language, even though professional tax sources are in agreement that the restoration applies. Have your CPA confirm this one before you rely on it.

A new limit on itemized deductions for top-bracket filers. Beginning in 2026, taxpayers in the 37% bracket see itemized deductions reduced by 2/37 of the lesser of total itemized deductions or taxable income above the 37% bracket threshold. That directly reduces the value of both the mortgage interest and property tax deductions at the top end.

The honest summary

Homeownership still carries real federal tax benefits, but fewer and narrower than the standard real estate blog post suggests, and the standard deduction means a large share of homeowners get none of them.

The productive version of year-end tax planning is not a checklist of ten moves. It is one conversation, with someone who can see your actual return, before 31 December. Bring this list of questions to that conversation.