Understanding when You Can Deduct Mortgage Interest on Your Taxes
Monday, 18 March 2024, 12:30
Mortgage Interest Deduction Guidelines
If you have a mortgage, you may be eligible to deduct the interest costs and save money on your tax bill. The ability to deduct mortgage interest depends on various factors such as the loan amount and when the debt was incurred. Here's what you need to know:
When You Can Deduct Mortgage Interest
- You can typically deduct interest on a mortgage loan for a primary residence or second home when filing your tax return.
- Full deduction is allowed on mortgages up to $750,000 or up to $1 million for loans incurred before Dec. 16, 2017.
Limitation on Deducting Mortgage Interest
- One can only deduct mortgage interest if itemizing on taxes, which requires exceeding the standard deduction.
- With the standard deduction being high, most taxpayers opt for it over itemizing, resulting in less opportunity for mortgage interest deduction.
Ultimately, deducting mortgage interest requires careful consideration based on individual circumstances and tax filing strategy for optimal savings.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.