Are HOA Fees Tax Deductible?

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If you’re a homeowner, you’re probably wondering if your HOA fees are tax deductible?

Although the United States has an incredibly complicated tax code, it does allow for a large number of tax deductions you can take advantage of today. This allows you to lower your pre-tax income.

By doing this, you’re able to pay less in taxes or you may even receive a refund check from the IRS.

Let’s take a quick look at whether or not you can write-off your HOA fees.

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What is an HOA?

If you’re not familiar, a Homeowners Association (HOA) is an organization that oversees a neighborhood, community, or development. Usually, all members in the community will be responsible for maintaining certain standards that are set by the HOA.

Suburban Neighborhood with HOA Fees

Members may also be required to pay a fee each month or year so that the HOA can handle communal tasks like snow removal or amenity upkeep.

Are HOA Fees Tax Deductible?

When it comes to whether or not these membership fees can be deducted from your income, there are three answers:

  1. If the HOA fees are associated with your permanent residence then you can not deduct them.
  2. Or if the HOA fees are associated with a property that you rent out, then you are allowed to deduct all HOA fees as a rental expense.
  3. If you rent out part of your home but live in the other part as your permanent residence, then you can deduct the HOA fees associated with the portion of your home that you rent out. However, even if this is your primary residence then there is still an exception to this rule that will allow you to find a few deductions.

More Tax Savings: File at Ease at Home with Jackson Hewitt

Can You Write-Off HOA Fees if You Work From Home?

Yes, if you work from home then you can write off certain expenses related to your home office, which includes HOA fees.

Black woman working from home

However, this only applies if you are self-employed and choose to work from home. If you are a W-2 employee who is working remotely then this does not apply to you. Luckily, there is yet another exception to this rule.

Remember: Keep track of your expenses and income on a spreadsheet or bookkeeping program such as FreshBooks.

What Can Home Owners Write-Off on Taxes?

If you live in a home as your permanent residence but are not self-employed, there are still a few ways that you can reduce your tax bill.

Perfect American brick home but are HOA Fees Tax Deductible

Here are a few more homeowner’s expenses that you can deduct from your income when April 15th rolls around:

  1. Mortgage interest
  2. Property tax payments
  3. Capital gains from the sale of your home

Final Thoughts

Paying taxes is a constant game of cat and mouse, but I’m always here to help you understand the muddy waters of the tax world. The best way to save yourself money is to learn the rules of the game (or hire an expert who does), so that you can find as many tax benefits and deductions as possible.

Are your HOA fees tax deductible?
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I hope that you’ve found this article valuable in learning whether or not HOA fees are tax deductible. If you are interested in learning more, please subscribe here to get alerted of new articles as we write them!

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Until the next money adventure, take care from The Handy Tax Guy Team!

The Handy Tax Guy Tax Service

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