Tax season has begun and homeowners should understand the implications of their homeowners association (HOA) fees on tax returns. Generally, HOA fees are not tax deductible for primary residences. However, if homeowners use part of their property for business, such as a rental or home office, they may deduct a portion of HOA fees based on the space used. Tax experts suggest calculating this deduction by assessing the total HOA fees in relation to the square footage of the workspace versus the entire home.
If you buy a property as your primary residence and are responsible for paying HOA fees on a monthly, quarterly, or yearly basis, those fees are not tax deductible.
If you decide to take a home office deduction and are self-employed, a portion of your HOA can be considered tax deductible on a prorated basis.
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