Florida Mortgage Tax Deductions: What Records to Keep

After buying a Florida home, you may be able to deduct mortgage interest or property taxes on your federal return. You must meet IRS rules. The cost must also fit your tax return.

Most homeowners first compare itemized deductions with the standard deduction. Mortgage insurance, also called PMI, follows a different rule. For 2025 federal returns filed in 2026, the IRS says the mortgage-insurance deduction has expired.

This guide gives general information. It is not tax advice. Ask a qualified tax professional to review your records and the current IRS rules.

First, check whether itemizing helps

Mortgage interest and eligible property taxes are usually itemized deductions. You report them on Schedule A with Form 1040 or Form 1040-SR.

You cannot use both itemized deductions and the standard deduction on the same return. Buying a home does not always lower your federal tax.

Your itemized deductions must be higher than your standard deduction to make itemizing useful. Filing status can also change the result. Married filing separately has special limits.

Mortgage interest may be deductible

You may deduct qualified interest on a loan secured by your main home or second home. The loan money must generally buy, build, or substantially improve that home.

For 2025 returns, Publication 936 lists a general limit of $750,000 in qualifying mortgage debt. The limit is $375,000 for married people filing separately. Older debt may have a higher limit.

These limits can matter with a large loan, a second home, a refinance, or a home equity loan. Home equity interest is not automatically deductible. The use of the loan money matters.

See the IRS Publication 936, Home Mortgage Interest Deduction for the current rules.

Use Form 1098 as a starting point

Your mortgage servicer may send Form 1098. A lender generally must send it when it received at least $600 in mortgage interest on that mortgage during the year.

The $600 test applies to each mortgage. Form 1098 is an information form. It does not prove that every reported dollar is deductible.

Compare the form with your mortgage statements and closing records. This helps you spot missing or duplicate amounts.

Check prepaid interest at closing

At closing, you may pay daily interest before the first regular payment. This is called prepaid or per-diem interest.

Some prepaid interest may appear on Form 1098. If it does not, your Closing Disclosure may show the amount. Do not count the same interest twice.

For more detail, read Florida Prepaid Interest at Closing: What It Means.

Separate escrow deposits from property taxes

Your mortgage payment may include an escrow amount. Your servicer holds that money for future taxes and insurance.

An escrow deposit is not the same as a property-tax payment. For federal tax purposes, review the amount your servicer actually paid to the taxing authority.

Check your annual escrow statement, county tax bill, and payment history. These records can help show when the tax was paid.

This matters for new owners in Pinellas County and other Florida counties. An initial escrow deposit at closing helps fund future bills. It is not automatically a current-year deduction.

Closing papers may also show a tax adjustment between the buyer and seller. The correct treatment can depend on the settlement statement, the tax period, and each party’s ownership period. Ask a tax professional to review that entry.

Read Florida Property-Tax Escrow After Buying a Home to learn why escrow payments can change.

The SALT limit may reduce your property-tax deduction

Property taxes are part of the state and local tax deduction. This is often called the SALT deduction.

For 2025 returns, the general SALT limit is $40,000. The limit is $20,000 for married people filing separately.

The limit may be reduced when modified adjusted gross income is above $500,000. For married filing separately, the income threshold is $250,000. The limit does not fall below $10,000, or $5,000 for married filing separately, under the 2025 instructions.

These amounts can change. Confirm the rule for the tax year you are filing.

Florida homestead benefits may lower your local property-tax bill. They do not create a separate federal deduction.

For Florida homestead information, see the Florida Department of Revenue guidance. You apply through the property appraiser in the county where the home is located.

If you bought in Pinellas County, read Pinellas County Homestead Exemption: Apply After Buying.

PMI is different

Private mortgage insurance is often called PMI. Do not assume PMI is deductible.

For 2025 federal returns, the IRS says the itemized deduction for mortgage-insurance premiums has expired.

Future tax rules may change. Check the current IRS guidance before filing a later return.

For the loan-cost side, read Lender-Paid vs. Borrower-Paid PMI in Florida: Cost Comparison.

Points need a separate review

Mortgage points are charges paid to get a loan. One point is often 1% of the loan amount.

Points paid to buy or build a main home may be deductible in the year paid if IRS tests are met. The charge must meet several rules. It must also be clearly shown as points on the closing statement.

Points on a refinance are often deducted over the life of the new loan. Some exceptions apply when refinance funds improve the main home.

Keep your Closing Disclosure even if the points appear on Form 1098. It shows what the charge was for.

Read Florida Mortgage Discount Points: Break-Even Math for the payment side of points.

Records to keep

Create one digital folder for your home. Keep clear copies of these records:

• Form 1098: Save each yearly mortgage-interest statement.
• Closing Disclosure: Keep it for prepaid interest, points, and tax adjustments.
• Mortgage and escrow statements: Use them to check interest and taxes paid from escrow.
• County tax bills: Keep the full bill and payment proof.
• Mortgage statements: Save them if you need to check Form 1098.
• Improvement records: Keep invoices, receipts, contracts, and proof of payment.
• Prior tax returns: Keep returns and records that support your claims.

Keep records that support a deduction until the IRS period for that return ends. That period is often three years after filing. Some situations require longer retention.

Keep home-improvement records while you own the home. You may need them to calculate your tax basis when you sell.

A repair keeps a home working. An improvement adds value, extends use, or changes the home’s use. Ask a tax professional about close cases.

Before filing, match each question to a record

1. Wait for Form 1098 from your servicer.
2. Compare it with your year-end mortgage statement.
3. Check your escrow statement for taxes paid to the county.
4. Review your Closing Disclosure for interest, points, and tax adjustments.
5. Check the county bill for fees or special assessments.
6. Compare itemized deductions with the standard deduction.
7. Ask a tax professional about shared ownership, refinancing, a second home, rental use, large loan balances, or married filing separately.

Frequently asked questions

Can I deduct every dollar paid into escrow?

No. An escrow deposit is not the same as a tax payment. Review the amount your servicer actually paid to the taxing authority.

Can I deduct homeowners insurance or HOA dues?

Generally, no. Homeowners insurance, title insurance, HOA dues, condo fees, mortgage principal, and most closing costs are not Schedule A homeownership deductions.

What if I did not receive Form 1098?

You may not receive one if the interest paid to that mortgage holder was below $600. Keep your mortgage statements. Contact your servicer if you think a form is missing.

Does a Florida homestead exemption create a federal deduction?

No. A homestead exemption is a Florida property-tax benefit. Federal deductions follow separate IRS rules.

Official sources

• IRS Publication 530, Tax Information for Homeowners
• IRS Publication 936, Home Mortgage Interest Deduction
• IRS Instructions for Schedule A, Form 1040
• IRS Instructions for Form 1098
• Florida Department of Revenue property-tax guidance

Compliance note: This article is for educational purposes only. It is not tax, legal, or financial advice. Tax rules and individual facts vary. Mortgage programs and terms vary and are subject to underwriting and credit approval. This is not a commitment to lend.