Tax forms can help walk you through your filing step by step. To make sure you’re filing the right form, follow these steps to deduct mortgage interest on your 2024 taxes.
1. Choose A Standard Deduction Or An Itemized Deduction
If you choose the standard deduction, you won’t need to complete more forms and provide proof for all your deductions. It’s more of a “no questions asked” deduction, with a flat dollar amount that’s the same for most taxpayers. For the 2023 tax year, which will be the relevant year for April 2024 tax payments, the standard deduction is:
$14,600 for single filers
$29,200 for married couples filing jointly
$14,600 for married couples filing separately
$21,900 for heads of households
If you choose an itemized deduction, you can pick and choose from various deductions, including student loan interest, charitable contributions, medical expenses and more. To itemize your deductions, you must fill out additional forms to list each deduction. Be prepared to submit records, receipts and other documents that validate them.
Both standard and itemized deductions reduce your taxable income.
2. Get Your 1098 From Your Lender Or Mortgage Servicer
To fill out the information about the mortgage interest you paid during the tax year, you’ll need a Form 1098 from your mortgage lender or mortgage servicer (the company you make your mortgage payments to). Form 1098 details how much you paid in mortgage interest and points during the past year. It’s the proof you’ll need for your mortgage interest deduction.
Your lender or mortgage servicer will send the form at the beginning of the year your taxes are due. If you don’t receive it by mid-February, have questions we don’t cover in our 1098 guide or need help understanding your form, contact your lender.
3. Choose The Correct Tax Forms
You’ll need to itemize your deductions to claim the mortgage interest deduction. Since mortgage interest is an itemized deduction, you’ll use Schedule A (Form 1040), an itemized tax form, and the standard 1040 form.
Schedule A lists other deductions, including medical and dental expenses, taxes you paid and donations to charity. Go to the mortgage interest deduction part on line 8 and fill in the mortgage interest information from your 1098.
If you make money from the home – whether as a rental property or you use it for your business – you’ll need to fill out a different form because the way interest is deducted from your taxes depends on how you use the loan, not the loan itself.
You may need to use the following forms depending on your situation:
Schedule E:If you want to deduct the interest you pay on rental properties, use Schedule E (Form 1040) to report it. The form is used for supplemental income from rental real estate.
Schedule C: If you use part of your house as a home office or use money from your mortgage for business purposes, you may need to fill out Schedule C (Form 1040 or 1040-SR if you’re 65 or older) to report the profit or loss from a business you owned or operated.
You’ll list mortgage interest as an expense on either of these forms. Whatever mortgage interest you’re deducting or form you’re using, it’s important to know what qualifies as interest and what doesn’t. If you’re itemizing your deductions, read on.
Mortgage Interest Deduction Example
So, how should you decide between itemizing or taking the standard deduction? It all comes down to which one saves you more money. If taking the standard deduction saves you more money than itemized deductions, take the standard deduction. If itemizing saves more, itemize your deductions. But you can’t claim both. You must choose one or the other.
Let’s say you’re a single filer and itemize the following deductions: mortgage interest ($8,000), student loan interest ($1,400) and charitable donations ($2,000) for a total of $11,400. You should take the $14,600 standard deduction because an additional $3,200 would be deducted from your taxable income.
Now let’s say your mortgage interest is $12,000, your charitable donations were $2,000 and your student loan interest was $1,600. Your itemized deductions would total $15,600. In this case, taking the itemized deduction would make more sense because it would reduce your taxable income by $700 more than the standard deduction.
If you’re paying someone to prepare your taxes, itemizing your taxes may cost more because itemizing requires more work. You should factor in the cost of tax preparation when deciding which approach will save you the most money.
Before the TCJA, the mortgage interest deduction limit was on loans up to $1 million. Now, the loan limit is $750,000. For the 2024 tax year, married couples filing jointly, single filers and heads of households can deduct up to $750,000.Married taxpayers filing separately can deduct up to $375,000 each.
You can deduct the interest you paid on the first $750,000 of your mortgage during the relevant tax year. The limit is $375,000 for married couples filing separately.
1, 2026, a change enacted by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. The TCJA also prohibits deducting interest from home equity debt for the same tax years. In fact, most TCJA provisions pertaining to individual taxpayers are temporary and scheduled to sunset on Dec. 31, 2025.
You can deduct the mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt for your primary home or a second home. If you are married filing separately, the limit drops to $375,000.
For tax years before 2018 and after 2025, yes. Interest paid on a home equity loan secured by your main residence or second home may be deductible, subject to certain dollar limitations, regardless of how the proceeds of the loan are used.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and isn't deductible.
The 30-year fixed mortgage rate is expected to fall to the mid-6% range through the end of 2024, potentially dipping into high-5% territory by the end of 2025. Here's where mortgage interest rates are headed for the rest of the year and how that will impact the housing market as a whole.
The mortgage interest deduction is a tax incentive for homeowners. This itemized deduction allows homeowners to subtract mortgage interest from their taxable income, lowering the amount of taxes they owe. Homeowners can also claim the deduction on loans for second homes providing that they stay within IRS limits.
While almost all homeowners qualify for the mortgage interest tax deduction, you can only claim it if you itemize your deductions on your federal income tax return by filing a Schedule A with your Form 1040 or an equivalent form.
For 2024, the standard deduction amount has been increased for all filers, and the amounts are as follows. Single or Married Filing Separately—$14,600. Married Filing Jointly or Qualifying Surviving Spouse—$29,200. Head of Household—$21,900.
Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible.
The broad rule is that to claim the deduction, the property must be subject to a mortgage, and the property must be your principal or second residence (subject to dollar limits). That means that ownership is again an issue—but you don't have to be on the title to claim the home mortgage interest deduction.
Calculating your mortgage interest deduction is something you can do yourself. Divide the maximum debt limit by your remaining mortgage balance, then multiply that result by the interest paid to figure out your deduction.
How much mortgage interest is tax deductible? Up to $750,000 in interest is deductible for mortgages originating after December 15, 2017. The total limit is $375,000 for taxpayers with a married filing separately status.
The Act repealed the deduction for interest paid on home equity debt through 12/31/2025. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence. Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
Introduced along with the income tax in 1913, the mortgage interest tax deduction has since become the favorite tax deduction for millions of U.S. homeowners. Home mortgage interest is reported on Schedule A of the 1040 tax form.
The Tax Cuts and Jobs Act (TCJA) increased the standard deduction (set at $14,600 for single filers and $29,200 for joint filers in 2024) while suspending the personal exemption by reducing it to $0 through 2025.
Effective January 1, 2024, the federal estate and gift tax exemption amount increased from $12.92 million to $13.61 million per individual (a combined $27.22 million for a married couple), representing an increase of $690,000.
Introduction: My name is Aron Pacocha, I am a happy, tasty, innocent, proud, talented, courageous, magnificent person who loves writing and wants to share my knowledge and understanding with you.
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