Most taxpayers can deduct their home mortgage interest on their tax return. There are, however, some limitations and specific qualifications you’ll need to be aware of when doing so. Read on to learn the general rules pertaining to the home mortgage interest deduction.
- To deduct your mortgage interest, you must be itemizing your deductions using Schedule A of Form 1040.
- The mortgage must be secured debt on a property you hold an ownership interest in.
- The property must be your main or second home.
- Mortgage interest is deductible on up to $1,000,000 in home acquisition debt (for married couples filing jointly).
- You may only deduct mortgage interest on one second home, no matter how many second homes you own. If you rent out your second home, you must live in the property at least 14 days or 10% longer than the amount of time the property is rented out, whichever is longer. If you do not meet this threshold for time spent living in the property, it is considered a rental home, not a second home. (Note: if you do not rent out your second home, there is no use requirement for that property.)
- Mortgage insurance premiums may also be deductible as home mortgage interest.
- Other rules and limitations may apply.
Be aware that mortgage interest is deducted as an itemized deduction. As such, it is subject to the limit on total itemized deductions. If your adjusted gross income (AGI) is more than $311,300 (if married filing jointly), you may face limitations on how much mortgage interest is deductible.
If you’re not quite sure about deducting your mortgage interest, or you need help navigating some of the more complicated nuances of mortgage interest deductions, just give Taxation Solutions Inc. a call. We specialize in tax problems large and small, and we are standing by to serve you.