6 Overlooked Tax Breaks for Homeowners Over 50 That Could Save Hundreds (or Thousands) a Year
Written by
Jordan Rosenfeld
Edited by
Rebekah Evans
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By your 50s, your home is likely your biggest asset and one of your biggest opportunities to save on taxes.
Yet many homeowners assume they’ve already optimized their deductions, overlooking smaller, less obvious breaks that can add up to meaningful savings.
Experts suggest these strategic adjustments that can reduce your tax bill by hundreds or even thousands each year.
Property Tax Relief Programs
Many homeowners over 50 miss out on local property tax relief simply because they don’t realize they need to apply.
“In some areas, these programs can freeze the taxable value of a home, helping prevent large property tax increases as home values rise,” said Colton Pace, co-founder and CEO of Ownwell, a property tax appeal company.
These programs are typically offered at the county or state level and often require a simple application through your local assessor’s office, but you have to apply.
Energy Efficiency Tax Credits
Energy upgrades are another overlooked way to cut taxes while also reducing monthly expenses.
“Homeowners can claim 30% of the cost of qualifying improvements like heat pumps, insulation, efficient windows or solar installations, though some upgrades have annual caps,” Pace said.
State and city credits can often be combined with federal credits, he said, providing both tax savings now and longer-term reductions in utility costs.
Home Office and Income-Offsetting Deductions
For homeowners easing into retirement or generating part-time income, certain deductions tied to the home can offset taxable earnings. These are frequently missed because people don’t think of themselves as “business owners,” according to Brian Zink, CEO and founder of No Upfront Tax Relief.
So long as the retiree brings in a part-time income, such as from a freelance gig or side hustle, “a home office can offset self-employed income,” he said.
Medical Home Improvements
Some aging-in-place upgrades may qualify as medical deductions. Zachary Hellman, enrolled agent (EA), certified fraud examiner and the owner of Hellman & Associates, noted that these deductions can be more nuanced than homeowners expect.
The allowable medical deductions can include “ramps, widened doorways, railings, grab bars and similar accessibility improvements,” he said.
You do need to check with the IRS to be sure your medical improvement qualifies.
Downsizing and Timing Your Sale
Selling a home later in life can come with big tax advantages, namely the home sale exclusion, which can protect a large amount of profit from taxes, Zink said.
The federal home-sale exclusion is up to $250,000 for single filers and $500,000 for married couples filing jointly if the ownership and use tests are met, Hellman added.
Combined with lower ongoing costs from downsizing, this can create both immediate and long-term financial benefits.
Capital Home Improvements
Homeowners often miss out on future tax savings when selling a home, Hellman said. “Capital improvements increase the home’s tax basis, which can reduce taxable gain later when the home is sold,” he added.
Homeowners should keep receipts and stay organized during the year for tax filing later, especially those with substantial appreciation in their property value.
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