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Can I write off mortgage interest?

TL;DR

Yes, you can write off mortgage interest on your tax return, but there are certain limitations and conditions.

Detailed Answer

Mortgage interest is generally tax-deductible, but there are limitations. If you're filing as a single or married filing jointly, you can deduct interest on up to $750,000 of mortgage debt for a home purchased after December 15, 2017. If the home was purchased before this date, the limit is $1 million. This includes both your primary residence and a second home. However, if you're using the home for rental purposes, different rules apply. Also, you must itemize your deductions to take advantage of this tax benefit. If your standard deduction is higher than your itemized deductions, it may not be beneficial to write off your mortgage interest.

Where to Put It on the Tax Form

Schedule A (Form 1040), line 8a

Real World Example

For example, if you took out a $800,000 mortgage to buy your primary residence in 2018 and paid $30,000 in interest, you can deduct the interest on the first $750,000 of your mortgage, but not the remaining $50,000.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount, you would first determine the percentage of your mortgage that is deductible (in this case, $750,000/$800,000 = 93.75%). Then, you would multiply this percentage by the total interest paid ($30,000 * 93.75% = $28,125). So, you can deduct $28,125 of your mortgage interest.

Audit Risk & Documentation Tips

The IRS may require proof of the mortgage and the interest paid. Keep all mortgage statements and Form 1098, Mortgage Interest Statement, which your lender should send you at the end of the year. The risk of audit increases if the mortgage interest deduction is disproportionately high compared to your income.

IRS Reference

IRS Publication 936, Home Mortgage Interest Deduction

Relevant Industries

HomeownersReal EstateFreelancersSmall Business

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 3, 2025

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