Your Guide to Understanding Homeowners’ Mortgage Deductions
Posted April 8, 2007
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When you take out a mortgage, you must pay interest on the loan. Unfortunately, many homeowners are unaware of the fact that the interest may be tax-deductible, no matter what the interest rate. The interest you deduct may be secured by a loan on your first or second home. Be sure to talk to an experienced tax advisor–your deductions may be limited by whether the mortgages on your home total more than the fair market value of the home. You may deduct up to $1 million in the value of your home. For example, if your mortgage balance exceeds $1 million, your maximum deduction is the same as if you only owe $1 million. You can also deduct up to $100,000 in home equity debt. However, if you took the home equity loan out for buying another property, or building or improving your home, you may deduct up to the maximum loan amount. |
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