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Home Mortgage Interest is a tax-deductible expense that can help reduce your taxes owed and even make staying in your home for the long-term more affordable. Mortgage interest is reported on Form 1040 Schedule A along with other itemized deductions such as real estate property taxes, medical

expenses, and charitable contributions.

Taxpayers paying mortgage interest should fill out Schedule A to see if their itemized deductions exceed their standard deduction. If so, taxpayers will save more money on their taxes by itemizing. Taxpayers who itemize their deductions will need to file the Form 1040 long form. The following will help you apply for and determine your IRS Mortgage Interest Deduction.

Documents You Will Need

IRS Forms and Publications You Need

Qualifying for the Mortgage Interest Deduction

Mortgage interest includes interest you paid on loans to buy a home, home equity lines of credit, and construction loans. The amount you can deduct is limited, and you can only deduct interest paid on your main home and a second home. Interest paid on third or fourth homes, for example, is not deductible.

Secured Debt

The mortgage loan must be secured by your home in order for the interest to be tax-deductible and it must also:

  • Make your ownership in a qualified home security for payment of the debt;
  • Provide, in case of default, that your home could satisfy the debt;
  • Be recorded or otherwise be perfected under any state or local law that applies.

Read more about this in the next and upcoming issue of The Forever Home!

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