How Your Mortgage Can Actually Save You Money at Tax Time

A Local Guide for Homeowners in Hudson, WI & the Twin Cities

Your mortgage isn't just a way to finance your home — it can also work in your favor when it comes to taxes.

Whether you’re a current homeowner in Hudson, WI, or you’re exploring homes for sale in the Twin Cities or Western Wisconsin, understanding how your mortgage impacts your taxes could mean real savings.

Let’s break down the key ways your home loan can help lower your tax bill — and how to make the most of those benefits.

1. Deducting Mortgage Interest

One of the most valuable tax breaks for homeowners is the mortgage interest deduction.

Here’s how it works:

If your mortgage qualifies, you may be able to deduct the interest you paid during the year. This can:

• Reduce your taxable income

• Lower your total tax bill

• Maximize your return (especially in the early years of the loan)

Local Tip:

In the Hudson WI real estate market, home prices have been steadily climbing — especially for newer builds. That means many buyers are paying more in interest upfront, which makes this deduction even more impactful.

2. Property Tax Deductions

If you own a home, you’re paying property taxes — and a portion of those taxes may be deductible on your federal return.

What you can deduct:

• Local and state property taxes

• Up to $10,000 in combined state and local taxes (per IRS guidelines)

Why it matters in Hudson:

With more people moving to Hudson and property values on the rise, tax bills are increasing too. That makes this deduction even more important for homeowners to take advantage of.

3. Home Office Deductions (For Self-Employed Owners)

Are you self-employed or running a business from home? You might qualify for home office tax deductions — especially if you use a dedicated space in your home for work.

Possible deductions include:

• A percentage of your mortgage interest

• Utilities and internet used for the office

• Office-related maintenance or repairs

• Depreciation of the space used exclusively for business

Real Example:

A local Hudson photographer I worked with was able to write off part of her basement renovation by designating it as a dedicated studio. A little paperwork = big savings.

Note: These deductions are generally for the self-employed. If you're a remote W-2 employee, this won’t apply — but check with your tax pro to be sure.

4. Refinancing? There Could Be Tax Perks

If you've refinanced your home in Hudson or the Twin Cities, you might be eligible for certain tax advantages related to the new loan.

Potential benefits:

• Deducting points paid at closing

• Reducing the total interest paid (which could still be deductible)

• Restructuring your loan in a way that supports your overall tax strategy

Pro Tip:

Talk to both your lender and a tax advisor before or after refinancing. They’ll help you understand which deductions apply — and how to track them.

5. Tips to Maximize Your Tax Benefits

Every homeowner’s situation is a little different — and the tax code changes frequently. That’s why a little preparation goes a long way.

To get the most from your mortgage at tax time:

• Work with a qualified tax professional

• Keep accurate records of mortgage payments, interest, and expenses

• Don’t assume deductions — verify what applies to your situation

• Ask questions! Your lender, REALTOR®, and CPA are great resources

If you're not sure where to start, I can connect you with local experts who specialize in Hudson WI real estate and tax-smart strategies for homeowners.

🏡 Thinking About Buying, Refinancing, or Moving to Hudson?

Whether you’re making a move across town or looking for homes for sale in the Twin Cities, we’re here to guide you through every step — including how your mortgage fits into the bigger financial picture.

Let’s find a home (and a plan) that works for your lifestyle and your wallet.

📞 Ready to Chat?

Contact The Johnson Group at Coldwell Banker Realty today to explore your options, connect with trusted professionals, and start your next chapter with confidence.

• 📱 Call or text us at 651-333-7656

• 🌐 Visit www.johnsonhomegroup.com

• 📍 Proudly serving Hudson, WI and the greater Twin Cities metro

Written by Mark Johnson, REALTOR® and owner of The Johnson Group at Coldwell Banker Realty. With over 20 years of experience helping clients across Hudson and the Twin Cities, Mark offers expert real estate guidance with a personal touch.