Which of the following expenses can homeowners typically deduct on their taxes?

Homeowners typically can deduct discount points on their taxes because these points are considered prepaid interest on a mortgage loan. When a homeowner pays points in order to lower their mortgage interest rate, they can often deduct those points in the year they are paid. This can provide substantial tax benefits, especially for new homebuyers or those refinancing their mortgages.

Home improvement expenses, while beneficial for increasing property value, are generally not deductible unless they are tied to improvements made for medical reasons. Profits from the sale of a home can often be excluded from taxes up to a certain limit, but they are not deductible in the same way that discount points are. Utility expenses incurred during home ownership are considered regular living expenses and are not allowable tax deductions. Thus, discount points stand out as the correct answer because they directly relate to deductible interest for mortgage financing.