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IRS Raises Tax Deduction Cap to $40,000 for Homeowners

1/19/2026

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Summary

Story summary

The state and local tax deduction cap rises from $10,000 to $40,000, benefiting homeowners in high-tax areas and shifting planning considerations.
The Internal Revenue Service (IRS) will begin accepting returns on January 26 this year.
Energy-focused home improvement tax credits have been eliminated.
Experts say the best option depends on income and property location, guiding households as they plan deductions.

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Story summary

The state and local tax deduction cap rises from $10,000 to $40,000, benefiting homeowners in high-tax areas and shifting planning considerations.
The Internal Revenue Service (IRS) will begin accepting returns on January 26 this year.
Energy-focused home improvement tax credits have been eliminated.
Experts say the best option depends on income and property location, guiding households as they plan deductions.