Bought a house? Here’s what the IRS owes you

Good morning! May has arrived, the daffodils are doing their thing, and tax season is officially someone else’s problem, until next year, when it becomes yours again. In the meantime, there’s plenty to clean up, fix, and get ahead of. That’s what we’re here for.

This week’s lineup:

Money Moves

🏠 You bought a house. Here’s what the IRS will actually give you back.

Buying your first home feels, financially speaking, like being cheerfully mugged in slow motion. Down payment. Closing costs. The moment you discover what a homeowner’s insurance deductible actually means. And then someone mentions tax perks, and you think, surely there’s a silver lining here somewhere.

There is. It’s just more modest than the internet suggests.

The biggest one is the mortgage interest deduction. You can deduct interest on a mortgage balance up to $750,000, but only if you itemize your deductions. That last part is the catch. With the standard deduction for 2026 set at $16,100 for single filers and $32,200 for married couples filing jointly, many people may find their mortgage interest isn’t enough to justify itemizing. Run the numbers before you assume.

If you do itemize, property taxes can also help. The One Big Beautiful Bill Act temporarily expanded the SALT deduction limit to $40,400 for single filers or married couples filing jointly for the 2026 tax year, up from the previous $10,000 cap, which is genuinely useful if you’re in a high-tax state.

There’s also a quiet perk most first-timers don’t know about. First-time homebuyers can withdraw up to $10,000 from a traditional IRA, penalty-free, to put toward a purchase. You’ll still owe income tax on it, but you dodge the usual 10% early withdrawal penalty, which, if you’ve ever looked at your retirement account and thought this is technically money, is worth knowing.

And finally, a deduction for PMI payments expired after 2021 but has been reinstated starting in 2026, so if you’re paying private mortgage insurance, that becomes deductible on next year’s return.

None of this makes up for what you spent on closing. But it helps.

👉 Read More: IRS Publication 530 — Tax Information for Homeowners

Filing 101

🍼 The new baby tax hack

We know you’re tired. The bags under your eyes probably have their own zip codes. But if you welcomed a tiny, expensive human into your home in 2025, wake up. The government actually wants to pay you for your trouble.

Here is the secret: The “One Big Beautiful Bill Act” (OBBBA) passed, and it isn’t just boring legislation. It’s a permission slip to get paid.

For the tax return you are filing right now (in early 2026), there are two massive numbers you need to know.

First, the Child Tax Credit got a raise. It is now $2,200 per child. Even better, if you owe the IRS absolutely nothing, they will still refund you up to $1,700 of that cash.

Second, and this is the part most people will miss: The “Trump Account” Pilot Program.

If your child was born after Dec. 31, 2024, the government is offering a $1,000 one-time contribution to start a savings account for them.

This $1,000 is not automatic. You have to make an “election” on your tax return (Form 4547). If you don’t check the box to ask for it, the Treasury keeps the money. Do not let them keep the money.

The IRS does not trust you. You cannot just write “Baby McBabyface” on your tax return. You must have the child’s Social Security Number listed on the return.

If you are still waiting for the card in the mail, do not file yet. File an extension. If you file without the number, the IRS treats it as a math error and denies the credit immediately.

Go get that Social Security card, check the box for the Trump Account, and claim your $3,200. You earned it during the 3 a.m. feedings.

👉 Read More: Trump Accounts

IRS Survival Guide

🫣 That IRS letter: A guide to CP letters

Mail from the IRS is never a birthday card. It’s a slow-moving four-act play that starts with a knock at the door, and each notice gets a little meaner.

The CP14: The Polite Knock

This is the “you owe money” letter.

No need to panic. Read it. Compare it to the tax return. Decide whether it’s correct.

The CP501 & CP503: The Louder Knock

Skip the CP14, and the reminders start rolling in.

The tone shifts to urgent, and words like lien start appearing.

The CP504: The Final Warning Shot

This one is serious. The CP504 is the Intent to Levy notice.

At this point, the situation has escalated from “issue” to “crisis.”

Do not ignore these letters. If you agree but can’t pay:

If you disagree:

A CP14 is a problem. A CP504 is a crisis. TaxQuotes handles both, and everything in between. Their team takes the call, files the response, and works out a plan that fits your actual budget.

👉 Click here to let TaxQuotes step in before the next letter arrives.

Wild Tax Tales

🎬 “Blade” runner to tax runner: The Wesley Snipes saga

Wesley Snipes once ruled the box office. Off-screen, though, he picked a fight with the IRS, and the IRS won. His case is a warning about fringe tax theories and the cost of ignoring filing obligations.

Between 1999 and 2004, Snipes stopped filing tax returns. He teamed up with two tax protestors and embraced the bizarre “861 argument,” which claims U.S. citizens don’t owe taxes on income earned in the United States.

What he was charged with:

He even sent the IRS a letter declaring himself a “non-resident alien.”

The jury acquitted him of the major felonies but convicted him on three misdemeanor counts of willful failure to file. His co-defendants were found guilty on the more serious charges.

In 2008, Snipes was sentenced to three years in federal prison, the maximum allowed. He served more than two years before finishing his sentence under house arrest.

Prison didn’t erase the tax bill. The IRS pursued $23.5 million in back taxes. Snipes attempted to settle with an Offer in Compromise of $842,000. The IRS estimated he could pay millions more and rejected the offer. The Tax Court upheld the decision.

You can’t opt out of the tax code. And believing fringe theories won’t save you. The IRS waits, calculates, and collects.

The quick (and slightly prickly) stories we didn’t have time to get to:

If you made it this far, you’re our kind of nerd. Hit reply and tell us which story you want us to dive deeper into next week.