Mortgage Interest Deduction...

One of the best deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgageinterest deduction, your mortgage must be secured by your home and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet.

 

Interest you pay on a mortgage of up to $1 million or $500,000 if you’re married filing separately is deductible when you use the loan to buy, build, or improve your home.

 

If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.

 

If you use loans secured by your home for other things like sending your child to college you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.

 

Important Note - The mortgage interest deduction is a huge advantage of owning a home.  It is often referred to as the MID.  The MID has been in the news a lot lately because there are some that are trying to eliminate this very important deduction that helps thousands of homeowners each year.  If you have an opportunity to give a voice to this issue, please speak up to help preserve this important benefit of homeownership.

 

NancyPuder is the broker and owner of Signature Properties, a real estate sales andmanagement firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415. She always enjoys hearing from you!