Can I Deduct My Mortgage Interest?
Mortgage interest deduction is a significant benefit for homeowners, allowing you to lower your taxable income by the amount of interest you pay on your mortgage. However, certain criteria must be met to qualify for this deduction.
Eligibility Criteria
- Type of Loan: The loan must be secured by your primary residence or a second home.
- Loan Amount: For mortgages taken out after December 15, 2017, you can deduct interest on loans up to $750,000. For mortgages prior to this date, the limit is $1 million.
- Filing Status: You should itemize your deductions on Schedule A of your tax return to benefit from the mortgage interest deduction.
How to Claim the Deduction
To claim the mortgage interest deduction, locate Form 1098, which your lender provides. This form details the amount of interest you've paid during the year. Transfer this amount to your tax return when you itemize your deductions.
Limitations and Considerations
Note that if you are married and file separately, your mortgage interest deduction limits may be different. Additionally, interest on home equity loans used for non-home-related expenses is generally not deductible. Always consult with a tax professional for personalized advice.