Many New Yorkers have questions about their tax deductions this time of year. The most common (as you may have guessed)? How to make a tax bill as teensy as possible — or, better yet,  how to get a tax refund? For the best advice on your unique financial situation, you should, of course, consult a tax professional well in advance of the April 18, 2023 filing deadline. That said, we polled a couple of pros for their overarching tax advice on making a big refund possible — legally — including mortgage interest deductions and write-offs for your home office. Come on, let’s get working on a tax refund!

Manhattan Homes for Under $650K on StreetEasy Article continues below

Murray Hill

225 East 36th Street

$445,000

Studio |

1

Greenwich Village

13 West 13th Street

$488,888

Studio |

1

Lenox Hill

520 East 76th Street

$550,000

1 |

1

Hudson Heights

263 Bennett Avenue

$539,000

2 |

1

Hudson Yards

433 West 34th Street

$495,000

Studio |

1

South Harlem

1787 Madison Avenue

$400,000

1 |

1

Midtown

111 East 56th Street

$325,000

Studio |

1

Hudson Heights

736 West 186th Street

$460,000

1 |

1

South Harlem

353 West 117th Street

$549,000

2 |

1

South Harlem

130 Lenox Avenue

$538,500

3 |

2

Upper West Side

310 Riverside Drive

$320,000

Studio |

1

Hell’s Kitchen

857 Ninth Avenue

$470,000

1 |

1

Can Mortgage Interest Be Deducted in 2023?

We asked Xintian Wang, a CPA and Senior Tax Manager at Dimov Tax Specialists. His response? “If you own a condo or a co-op in NYC with a mortgage, you can deduct mortgage interest on the first $750,000 of the loan with a single or married filing jointly status.” 

But when it comes to getting a tax refund, there’s a twist if you are married and filing taxes separately. You can only deduct interest paid on the first $375,000. Did you take out a mortgage before December 16th, 2017? Here’s some good news. You can deduct interest paid on the first $1 million. However, if you are married and filed separately, the number is reduced to $500,000, Wang says. “Mortgage points you paid also qualify for deductions.”

Deductions apply to second homes, too, says Aaron Smyle, MBA, MST, EA, founder of Manhattan-based Smyle and Associates, LLC. The $750,000 worth of principal limitation was introduced by the Tax Cuts and Jobs Act (TCJA) and will revert to $1 million after 2025, Smyle says.

Brooklyn Homes Under $650K on StreetEasy Article continues below

Coney Island

2932 West Fifth Street

$389,000

2 |

1

Brooklyn Heights

70 Clark Street

$465,000

Studio |

1

Sunset Park

755 42nd Street

$525,000

2 |

1

Coney Island

2944 West 5th Street

$320,000

1 |

1

Fort Hamilton

61 Oliver Street

$359,000

1 |

1

Manhattan Beach

15 West End Avenue

$489,000

1 |

1

Sheepshead Bay

2717 East 28th Street

$334,000

2 |

1

Fort Hamilton

149 Marine Avenue

$479,000

2 |

1

Canarsie

719 East 85th Street

$549,000

3 |

2

Downtown Brooklyn

175 Willoughby Street

$550,000

Studio |

1

Brighton Beach

62 Brighton 2 Place

$595,000

2 |

2

Farragut

5430 Kings Highway

$598,000

3 |

2

Can You Get a Tax Refund for Home Office Deductions in 2023?

Unfortunately, W2 employees are no longer able to take a write-off for home offices due to the Tax Cuts and Jobs Act. “If you are self-employed or an independent contractor, you can deduct home office expenses and any expenses that are related to your job,” Wang says. 

But getting a tax refund is not as easy as checking a “worked from home” box on your taxes. “If you’re looking to take the deduction, the office portion of your home has to be used exclusively as an office,” Smyle says. The sofa where you eat takeout and watch Netflix won’t cut it. “There’s also a formula for determining the amount to deduct for a home office based on the size of your home. For example, if your home office is 200 sq. ft, and your apartment is 800 sq. ft., your workspace is 25% of your home. Afterward, that percentage is applied to total yearly rent and utilities, or if you own, it’s applied to mortgage interest, maintenance, and utilities.”

If you live in New Jersey and work in New York, you may be worried about having to fork over taxes in both states. You will need to file a New York tax return and pay taxes on income earned in New York. The bright spot? You will get a tax credit for earned income in New York for New Jersey, so you’re not paying state taxes on the same income twice. Phew!

Brooklyn Rentals Under $3,000 on StreetEasy Article continues below

Bath Beach

33 Bay 26th Street

$3,000 No Fee

3 |

2

Bay Ridge

190 72nd Street

$2,600 No Fee

2 |

1

Cobble Hill

147 Pacific Street

$2,950 No Fee

Studio |

1

Gravesend

1837 West 9th Street

$2,300 No Fee

2 |

1

Fort Hamilton

9265 Shore Road

$2,395 No Fee

1 |

1

Prospect Lefferts Gardens

626 Flatbush Avenue

$2,900 No Fee

Studio |

1

Bedford-Stuyvesant

1516 Fulton Street

$2,600 No Fee

1 |

1

Fort Hamilton

8706 Third Avenue

$2,400 No Fee

1 |

1

Gravesend

2230 Cropsey Avenue

$2,901 No Fee

1 |

1

Midwood

909 East 29th Street

$2,800 No Fee

2 |

1

Gravesend

2230 Cropsey Avenue

$2,825 No Fee

Studio |

1

Prospect Lefferts Gardens

528 Flatbush Avenue

$2,199 No Fee

1 |

1

What’s the Deal With Property Tax Deductions for 2023?

“With the ability to work remotely, a lot of people have been out of the city [in recent years] and want to see what they can do to minimize their tax liability,” Smyle says. “Intent is one of the biggest factors determining residency status and a temporary living situation. It would not absolve one from having to pay income taxes here in the city.” Smyle advises being extra careful if you’re trying to change your status to “non-resident” for tax purposes. “There are a lot of items that need to be in place to properly, and ethically, make that claim.”

Wang notes that if you pay real estate tax or property tax, you can add that to your itemized deduction for a potential tax refund. But the total tax deductions, including state and local taxes, are capped at $10,000 ($5,000 if married filing separately) on the Federal side. “For New York purposes, the deductions are not subject to the Federal limit,” she says.

Jersey City Rentals Under $3,000 on StreetEasy Article continues below

Newport

40 Newport Parkway

$2,885 No Fee

Studio |

1

Journal Square

345 Baldwin Avenue

$2,700 No Fee

1 |

1

Journal Square

345 Baldwin Avenue

$1,958 No Fee

Studio |

1

Jersey City

36 Park Street

$1,847 No Fee

Studio |

1

Jersey City

206 4th Street

$2,200 No Fee

2 |

1

West Side

50 Dey Street

$2,700 No Fee

1 |

1

Jersey City

211 Clerk Street

$1,995 No Fee

2 |

6

Jersey City

169 Garfield Avenue

$2,500 No Fee

2 |

1

The Heights

121 Lincoln Street

$3,000 No Fee

3 |

2

West Side

131 Kensington Avenue

$3,000 No Fee

3 |

1

Jersey City

313 Pine Street

$2,200 No Fee

1 |

1

Bergen/Lafayette

340 Randolph Avenue

$2,100 No Fee

2 |

1

Are Home Improvements Eligible for Tax credits?

Call it the HGTV effect. It’s possible to write off home equity loan interest if you used the loan for renovations on your place — but only if they’re substantial improvements. Sorry, repainting the bathroom doesn’t count. What’s another way to nab a potential tax credit? If you installed energy-efficient upgrades, including qualifying energy-efficient windows, you can likely apply for a credit of 10% or more. But before doing, please consult with a tax professional.

NYC’s Enhanced Real Property Tax Credit for Renters

If you live in a rental, rejoice! “Renters in New York City may claim a tax credit on their state tax returns,” Wang says. “If you lived in the same apartment or house for at least six months, are a full-year NYC resident, and your household income is below $200,000, you are eligible for a credit up to $500. The credit also applies to taxpayers who own properties and pay real estate taxes.” 

If you gleaned nothing else from this article, take this advice from Smyle to heart as you prepare for your possible 2023 tax refund: “As we are approaching year-end, you should start to get your financial documents in order. Remember, shoeboxes are for shoes, so get your receipts itemized and organized.” Spoken like a true tax pro.