🧾 Planning Ahead for the 2025 Tax Season: What St. Louis Homeowners Should Know
As we enter a new year, tax season might not be top of mind—but smart homeowners know that planning now can lead to big savings later. Whether you’re a current homeowner in St. Louis or looking to purchase a home this year, understanding how tax law changes impact real estate deductions is essential.
The Tax Cuts and Jobs Act (TCJA), which took effect on January 1, 2018, brought sweeping changes to the tax code. While many of these changes remain in place through 2025, their long-term effects on homeownership, deductions, and real estate investing are now better understood.
Here’s what homeowners in the St. Louis area should know when planning for the 2025 tax season.
🏠 Key Real Estate-Related Tax Changes Still in Effect
1. Mortgage Interest Deduction Limits
Homeowners can still deduct interest on mortgage debt, but the cap remains reduced:
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Loans taken out after 2017 are limited to $750,000 in deductible mortgage debt (down from $1 million).
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Loans originated before 2018 are grandfathered in at the previous $1 million threshold.
This change impacts refinancing, second homes, and new buyers—especially in higher-value markets.
2. Home Equity Loan Interest Deductions
Interest on home equity loans and lines of credit (HELOCs) is only tax-deductible if the funds are used to substantially improve the property.
That means using equity for debt consolidation or personal expenses won’t qualify for a deduction.
3. State and Local Tax (SALT) Deduction Cap
The $10,000 SALT cap remains in place, limiting the amount homeowners can deduct from combined state income and local property taxes. While this hits higher-tax states the hardest, St. Louis homeowners with larger properties or higher incomes may still feel the pinch.
4. Standard Deduction Still High
The TCJA nearly doubled the standard deduction—and in 2025, it remains high:
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$13,850 for single filers
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$27,700 for married couples filing jointly
This reduces the number of taxpayers who itemize, which may lessen the tax-related incentive to buy for some—but for others, it simplifies filing and reduces overall tax liability.
💡 What This Means for St. Louis Homeowners in 2025
The cumulative impact of these changes has reshaped how homeownership affects your taxes. While the deduction benefits may not be as strong for every homeowner, owning a home still provides long-term financial advantages—including appreciation, equity building, and stability.
In the St. Louis real estate market, where home prices remain relatively affordable compared to coastal markets, many homeowners still benefit from itemizing—especially when combined with charitable contributions, medical expenses, or other deductions.
✅ Tips for Tax-Smart Homeownership
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Talk to a tax professional before making big real estate moves like refinancing or tapping into home equity.
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Track home improvements—capital improvements may increase your home’s cost basis, reducing taxes when you sell.
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Plan your listing or purchase strategically based on how mortgage interest or property tax deductions affect your overall financial picture.
📚 Additional Resources
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The IRS provides current guidance on real estate-related deductions:
Visit IRS Real Estate Tax Center
