Prior to 2018, mortgage interest on $1M primary mortgage and Home Equity loan interest on a loan up to $100k were deductible on your Schedule A itemized deduction form of your tax return.  With the new tax law that has changed and caused a bit of confusion:

For mortgages taken out in 2018, the total combined mortgage loan amounts (primary and home equity/second) where interest can be deducted has dropped to $750,000.  The question is what about Home Equity Loan interest?  The new tax law made it sound as if Home Equity loan interest would no longer be deductible, however per the IRS that is not the case.  If a Home Equity loan was taken out to specifically make improvements to the property then the interest on the loan can still be deducted on your Schedule A.  The caveat is that the loan has to be to improve the residence it is loaned against, no using it to pay off credit cards, vacations, etc…

For more info see the IRS’ statement on this:  https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law

Sorry, the comment form is closed at this time.