Online Mortgage Calculator

You can deduct mortgage interest on your taxes if you have paid interest on homes that meet the stipulations the Internal Revenue Service (IRS) has for claiming these deductions. For the most part, all of the interest that you pay for your home loan is allowable. Certain circumstances may exempt all or part of the payments that you make to your home loan company. If you have two homes and one is your primary residence and the other is one that you live in at least 14 days of the tax year, then you can claim the allowable deduction for interest on both home loans. The second home must be security for the note that you are claiming the interest on and it must not be rented for all the days in the tax year.

You can deduct mortgage interest on your taxes if you have a home equity line of credit (HELOC) or if you have a home equity loan. These loans must specify in their language that the home is security for the loan and the lien must be recorded with the appropriate local and state authorities. You can rent the second home, but you must not rent it for the entire tax year. You will have to live in the home at least 10% of the time that you have for total rental days or you must live in the home for at least 14 days.

You can deduct mortgage interest on your taxes in the full amount if you initiated you loan prior to October 13, 1987. If you took your mortgage out after this date you will have a cap on the amount of interest that you can claim. If your filing status is NOT married filing separately then you can claim interest paid on up to one million of your total loans. If you are married filing separately then you and your spouse are limited to $500,000 each. If you have a home equity loan the limit is $100,000 and $50,000 if you file separately. You will not be able to deduct interest on more than two homes, one of which must be your primary residence.

Loans that are subsidized by the federal, the state, or local government funds you will only be able to claim the part of the interest payment that you pay personally. If you rent your home you must live in the dwelling for part of the tax year. If you rent the home every day of the tax year, you will have to claim the interest deduction as an expense using a different income tax form. Be sure that you check with your income tax preparer if you do not have a clear understanding of the tax rules for claiming interest that you have paid over the tax year. The rules can change and the accountant will stay abreast of the changes. You can deduct mortgage interest on your taxes, but you must be sure that you have a qualifying loan in order to do so.