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

South Harlem

208 West 119th Street

$625,000

2 |

1

Hell’s Kitchen

340 West 57th Street

$560,000

Studio |

1

Hamilton Heights

345 West 145th Street

$410,000

1 |

1

Upper East Side

150 East 83rd Street

$425,000

1 |

1

Washington Heights

834 Riverside Drive

$435,000

1 |

1

Lenox Hill

1420 York Avenue

$445,000

Studio |

1

Manhattanville

575 Riverside Drive

$460,000

1 |

1

Upper West Side

269 West 72nd Street

$430,000

Studio |

1

Sutton Place

36 Sutton Place South

$575,000

1 |

1

Yorkville

237 East 88th Street

$585,000

1 |

1

Beekman

2 Beekman Place

$439,000

Studio |

1

Greenwich Village

60 East 9th Street

$575,000

Studio |

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

Borough Park

1238 63rd Street

$599,000

1 |

1

Borough Park

1238 63rd Street

$530,000

1 |

1

Bay Ridge

6735 Ridge Boulevard

$485,000

2 |

1

Bedford-Stuyvesant

417 Nostrand Avenue

$425,000

Studio |

1

East Flatbush

417 East 51st Street

$650,000

3 |

1.5

Homecrest

3178 Nostrand Avenue

$309,000

2 |

2

Borough Park

1238 63rd Street

$628,000

1 |

1

Gravesend

80 Avenue P

$380,000

1 |

1

Homecrest

2503 Ocean Avenue

$399,000

Studio |

1

Coney Island

2930 West 5th Street

$359,000

2 |

1

Gravesend

2265 West 7th Street

$525,000

2 |

1

Homecrest

1410 Avenue S

$329,999

1 |

1

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

Flatbush

561 East 26th Street

$2,500 No Fee

2 |

1

Bushwick

287 Cornelia Street

$2,175 No Fee

1 |

1

Flatbush

1471 Nostrand Avenue

$2,400 No Fee

1 |

1

Midwood

1792 Ocean Avenue

$2,429 No Fee

1 |

1

Midwood

1792 Ocean Avenue

$2,995 No Fee

2 |

2

Flatbush

286 Linden Boulevard

$2,495 No Fee

1 |

1

Stuyvesant Heights

321 Pulaski Street

$2,550 No Fee

2 |

1

Williamsburg

53 Graham Avenue

$2,400 No Fee

1 |

1

Prospect Heights

195 Underhill Avenue

$2,498 No Fee

Studio |

1

Crown Heights

2303A Pacific Street

$2,350 No Fee

2 |

1

Bushwick

1198 Putman Avenue

$2,900 No Fee

2 |

1

Bushwick

820 Wyckoff Avenue

$2,495 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

Paulus Hook

155 Washington Street

$2,964 No Fee

1 |

1

Paulus Hook

155 Washington Street

$2,361 No Fee

Studio |

1

Jersey City

179 Neptune Avenue

$2,000 No Fee

Studio |

0

Historic Downtown

160 Morgan Street

$2,608 No Fee

1 |

1

Jersey City

509B Ocean Avenue

$2,800 No Fee

4 |

1

Jersey City

154 Mercer Street

$3,000 No Fee

2 |

1

Jersey City

171 Ocean Avenue

$1,800 No Fee

1 |

1

The Heights

34 Prospect Street

$3,000 No Fee

2 |

2

Journal Square

135 Van Wagenen Avenue

$2,350 No Fee

2 |

1

Jersey City

332 Communipaw Avenue

$2,300 No Fee

1 |

2

Jersey City

224 Garfield Avenue

$2,775 No Fee

2 |

2

West Side

14 Van Wagenen Avenue

$2,500 No Fee

3 |

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.