If you bought a house this year, four documents drive almost everything on your tax return: the Closing Disclosure from your purchase, Form 1098 from your lender, your property tax records, and receipts for any capital improvements you make. The tax documents you need after buying a house serve two different purposes — some feed into this year’s return, and some sit in a permanent file that matters only when you eventually sell. For the 2026 tax year, the mortgage interest deduction still applies to the first $750,000 of loan debt, and the state and local tax deduction cap has risen to $40,400 for most filers, so more new homeowners will find these records worth pulling together.
The Closing Disclosure
The Closing Disclosure is the single most important document from your purchase. It’s a five-page form your lender must provide at least three business days before closing, laying out loan terms, monthly payments, fees, and every closing cost.1Consumer Financial Protection Bureau. What is a Closing Disclosure? Several lines on this form feed directly into your return, and others matter only when you sell. File it somewhere permanent.
Three items on the disclosure carry tax weight:
Mortgage Points
Points are an upfront fee you pay your lender in exchange for a lower interest rate.2Consumer Financial Protection Bureau. Closing Disclosure Explainer The IRS treats them as prepaid interest, and you can usually deduct the full amount in the year you bought the home rather than spreading the deduction over the life of the loan. To qualify for the full first-year deduction, the loan must be for your main home, paying points must be normal practice in your area, the points can’t exceed the going rate, and the funds you brought to closing must equal or exceed the points charged.3Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction If you don’t meet all the conditions, you deduct the points gradually over the loan term.
If the seller paid points on your behalf at closing, you can still deduct them, but you must reduce your home’s cost basis by the same amount.4Internal Revenue Service. Topic No. 504 – Home Mortgage Points
Prepaid Interest
Your Closing Disclosure also shows the mortgage interest that accrued between your closing date and the end of that month. This amount is deductible, and it’s easy to miss because it won’t appear on the Form 1098 your lender sends in January.
Transfer Taxes and Recording Fees
Transfer taxes and recording fees are not deductible as taxes. The IRS considers them part of the cost of acquiring the property, so they add to your home’s cost basis.5Internal Revenue Service. Topic No. 703 – Basis of Assets A higher basis reduces any taxable gain when you sell, which is the reason the Closing Disclosure belongs in your permanent property file.
Form 1098 From Your Lender
Your lender sends IRS Form 1098 by early February, summarizing the mortgage interest and private mortgage insurance you paid during the prior calendar year.6Internal Revenue Service. Instructions for Form 1098 – Rev. 12-2026 Box 1 shows mortgage interest received; Box 5 shows mortgage insurance premiums. Both figures go on Schedule A if you itemize.
For 2026, the interest deduction is limited to debt of $750,000 or less ($375,000 if married filing separately). This cap, originally set by the 2017 tax law, has been made permanent.6Internal Revenue Service. Instructions for Form 1098 – Rev. 12-2026 If your mortgage balance is above that threshold, only a proportional share of the interest is deductible.
Private mortgage insurance premiums are treated as deductible mortgage interest starting in 2026 under the One Big Beautiful Bill Act. In prior years, the PMI deduction was a separate line item that expired repeatedly and came with income-based phase-outs. Under the new rule, PMI is folded into your mortgage interest deduction, subject to the same $750,000 debt limit. If you put less than 20% down, check that Box 5 on your Form 1098 reflects what you actually paid.
One boundary worth flagging: interest on home equity debt remains non-deductible. A home equity loan or line of credit taken out after your purchase produces no deductible interest, regardless of how you use the funds.
If more than one person is on the mortgage, the lender typically issues a single Form 1098 under the primary borrower’s Social Security number. Co-owners need to coordinate so the total interest is split correctly between returns.
Property Tax Records
Property taxes show up in two places during your first year of ownership. Your Closing Disclosure captures any tax payments made at the closing table, often covering the period from closing through year-end. Your lender’s year-end escrow statement, or receipts for direct payments to the local assessor, cover the bills that come after. Add both together for the year’s total.
For 2026, the state and local tax (SALT) deduction cap is $40,400 for most filers, or $20,200 if married filing separately.7Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The cap covers property taxes plus either state income taxes or state sales taxes, combined. Taxpayers with adjusted gross income above $505,000 see the cap phase down, potentially back to $10,000. That’s a substantial increase from the $10,000 flat cap that applied from 2018 through 2024.
Verify your property tax numbers against the local assessor’s records before you file. Escrow statements and municipal records sometimes show slightly different figures because of timing or supplemental assessments.
Capital Improvement Receipts
Even if you don’t itemize this year, every receipt for a major home improvement matters for the long run. Capital improvements — projects that add value, extend the home’s useful life, or adapt it to a new use — increase your cost basis. A higher basis means less taxable profit when you eventually sell. A new roof, an added bathroom, or a kitchen renovation counts. Routine repairs like patching drywall or fixing a leaky pipe do not.
When you sell your primary residence, you can exclude up to $250,000 in capital gains, or $500,000 for a married couple filing jointly, as long as you owned and lived in the home for at least two of the five years before the sale.8Internal Revenue Service. Topic No. 701 – Sale of Your Home Homeowners who stay in one place for a long time in an appreciating market can exceed that exclusion, and documented improvements are the only way to shrink the taxable portion of the gain.
For each project, keep the contractor’s invoice, proof of payment, a description of the work, and the date it was completed. Save materials receipts if you do the work yourself.
Will These Documents Actually Help This Year?
Mortgage interest and property taxes are only worth claiming if your total itemized deductions exceed the standard deduction. For 2026, the standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household.7Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Add up your deductible mortgage interest (Form 1098 Box 1, plus any prepaid interest from the Closing Disclosure, plus PMI in Box 5), your property taxes, any state income or sales taxes, and other itemizable expenses like charitable contributions. If the total beats your standard deduction, itemize. If it doesn’t, take the standard deduction and file the records away — the picture can change in future years, and the capital improvement and Closing Disclosure records still matter for when you sell.
Energy Credits Have Expired
If you were counting on a federal tax credit for solar panels, a heat pump, or new insulation, the rules have shifted. The Residential Clean Energy Credit, which covered solar, geothermal, and small wind systems, applied to installations through December 31, 2025, and is not available for property placed in service after that date.9Internal Revenue Service. Residential Clean Energy Credit The Energy Efficient Home Improvement Credit, which covered windows, insulation, doors, and qualifying heat pumps, also expired at the end of 2025.10Internal Revenue Service. Energy Efficient Home Improvement Credit
If you installed qualifying equipment before the end of 2025 but haven’t filed for that year yet, claim the credit on your 2025 return using Form 5695. For 2026 installations, no federal residential energy credit is currently available.
How Long to Keep Each Document
Annual tax paperwork and property records follow different rules. For Form 1098 and property tax receipts, three to seven years after filing is generally enough.11Internal Revenue Service. How Long Should I Keep Records?
Anything that affects your cost basis is different. The IRS expects you to keep records related to your home until the statute of limitations expires for the tax year in which you sell the property.12Internal Revenue Service. Topic No. 305 – Recordkeeping In practice, that means holding onto your Closing Disclosure, improvement receipts, and basis calculations for as long as you own the home, plus at least three years after you file the return reporting the sale. If you eventually buy a replacement home in a way that carries over your basis, records from the old property have to come with you. A fireproof file or a secure digital backup is worth the small investment.