Can You Deduct Your Home Mortgage Interest?
Whether or not you can or should deduct home mortgage interest are two different questions. Generally, if you have a mortgage on your home, you can deduct it if you make under certain limits. Whether or not you should claim it depends on what other itemized deductions you qualify for. On this page, learn whether or not you can deduct your home mortgage interest on your next income tax return.
There are a few key determining factors for this deduction.
- Home mortgage interest can be deducted on the first $750,000 ($375,000 if married filing separately) of indebtedness. The $750,000 figure applies to all filing statuses excluding married filing separate. meaning joint returns, singles, surviving spouses, and heads of household.
- If the mortgage started before December 16, 2017, then the limits are $1 million and $500,000 if married filing separately.
- The Mortgage insurance premium (PMI) deduction has expired and can no longer be deducted.
- Home equity loan interest can only be deducted if the loan was to build, buy, or substantially improve the home.
The deduction is based on your home acquisition debt which is the cost of the actual loan and the debt you took on, excluding home improvements or other factors that may have affected its value.
Follow this simple chart for the answers to questions on who can claim home mortgage interest deductions on your current year tax return.
The table above is taken from the IRS publication on deducting home mortgage interest:
IRS Publication 936: Home Mortgage Interest Deduction
Generally, if you are home mortgage interest amount does not exceed your standard deduction when combined with all your itemized deductions, then it would not benefit you to itemize the mortgage interest deductions. However, if the total of all your total deductions exceeds the standard deduction, then you should itemize your deductions. When you use the eFile Tax App and eFile IT, this determination is done for you so you do not need to figure it out yourself. Itemized deductions are reported on Schedule A for Form 1040.
The home mortgage loan must be a secured debt on a qualified home. See Part I for details in the IRS Home Mortgage Interest Deduction publication. Additionally, details on how to deduct other interest payments are available in Part II.
A taxpayer may use the 2017 threshold amounts of $1,000,000 ($500,000 for married filing separately) if:
- They entered into a binding contract before December 15, 2017 in order to close on the purchase of a principal residence before January 1, 2018, and
- The purchase was finalized before April 1, 2018.
If both criteria are met, then you are considered to have incurred the home acquisition debt prior to December 16, 2017.
If your mortgage was taken out before October 14, 1987 or it was refinanced, then it may qualify as grandfathered debt which is not limited by the interest calculations. More details can be found in the linked publication above.
See additional information on how to report a home purchase or sale and filing instructions for 1099-S.
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